Driven by its strong liquidity position, Bank of the Ozarks, Inc. OZRK has increased its dividend for the 20th consecutive quarter. The company declared a quarterly cash dividend of 14 cents per share, representing a 3.7% rise over the prior payout. The dividend will be paid on Jul 24 to the shareholders of record as of Jul 17.
As of now, Bank of the Ozarks’ dividend yield stands at 1.2% considering last day’s closing price of $46.05. Though the yield is not that attractive for income investors, it can be assumed as a steady stream of income.
Further, we must note that Bank of the Ozarks also has a strong inorganic growth story. In May 2015, the company announced the signing of a definitive agreement to acquire Bank of the Carolinas Corporation in an all-stock deal worth roughly $64.7 million. In Feb 2015, the company completed the acquisition of Intervest Bancshares Corporation, with operations in New York and Florida, for $238.5 million.
Further, in 2014, Bank of the Ozarks had closed the acquisition of Texas-based Bancshares, Inc. in March and that of the Arkansas-based Summit Bancorp, Inc. in May. Notably, since 2010, the company has completed over 12 acquisitions, including those assisted by the Federal Deposit Insurance Corporation (“FDIC”).
As of Mar 31, 2015, the company’s cash and cash equivalents stood at $428.8 million, up significantly from $188.4 million as of Mar 31, 2014. Also, Bank of the Ozarks’ capital and profitability ratios remained strong.
We believe Bank of the Ozarks will continue to reward its shareholders by meaningfully deploying capital in the upcoming quarters. Further, the company’s robust balance-sheet position will aid its overall growth.
Along with a steady dividend income, the company also has a solid growth potential which is evident from our Growth Style Score of ‘B’. According to our style score system, a stock with favorable Zacks Rank and Zacks Growth Style Score of ‘A’ (or ‘B’) are highly desirable.
While growth is typically associated with revenue or EPS growth, the Growth Style Score goes beyond these conventional measures to incorporate elements from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
Currently, Bank of the Ozarks carries a Zacks Rank #3 (Hold).
Many other banks like KeyCorp. KEY, Washington Federal Inc. WAFD and Webster Financial Corp. WBS also continue to reward shareholders through dividend hikes and share repurchases.
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