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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank OZK in Focus
Bank OZK (OZK - Free Report) is headquartered in Little Rock, and is in the Finance sector. The stock has seen a price change of -11.82% since the start of the year. The bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 3.46% compared to the Banks - Northeast industry's yield of 3.12% and the S&P 500's yield of 1.56%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 7% from last year. Bank OZK has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank OZK's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
OZK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.93 per share, with earnings expected to increase 1.02% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, OZK is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Bank OZK (OZK) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank OZK in Focus
Bank OZK (OZK - Free Report) is headquartered in Little Rock, and is in the Finance sector. The stock has seen a price change of -11.82% since the start of the year. The bank is paying out a dividend of $0.38 per share at the moment, with a dividend yield of 3.46% compared to the Banks - Northeast industry's yield of 3.12% and the S&P 500's yield of 1.56%.
Looking at dividend growth, the company's current annualized dividend of $1.52 is up 7% from last year. Bank OZK has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 10.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank OZK's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
OZK is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.93 per share, with earnings expected to increase 1.02% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, OZK is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).