Updated 3/6/25
Bank OZK has built a reputation as a well-managed regional bank with a strong focus on commercial real estate lending. Headquartered in Arkansas, it has grown steadily over the years by maintaining disciplined loan practices and delivering consistent profits.
For income-focused investors, Bank OZK offers an attractive combination of a steady dividend, low payout ratio, and a yield that beats the broader market. With a solid history of rewarding shareholders, this stock is worth a closer look for those prioritizing income and stability.
Key Dividend Metrics
📈 Dividend Yield: 3.70%
💰 Annual Dividend: $1.68 per share
📅 Dividend Growth Streak: Over 10 years of consecutive increases
🛡 Payout Ratio: 25.73% (well covered by earnings)
📊 5-Year Average Dividend Yield: 3.33%
📆 Most Recent Ex-Dividend Date: January 14, 2025
🚀 Dividend Growth Rate (5-Year CAGR): Around 11%
Dividend Overview
One of the standout features of Bank OZK is its commitment to paying and increasing its dividend regularly. The current dividend yield of 3.70 percent sits above the five-year average, which signals a potentially favorable entry point for investors looking to lock in a steady income stream.
Unlike many companies that raise their dividends annually, Bank OZK takes it a step further by increasing its payout every quarter. This rare level of consistency speaks volumes about management’s confidence in its ability to generate earnings.
At just 25.73 percent, the payout ratio remains low, meaning the bank distributes less than a third of its profits as dividends. This leaves plenty of room for future increases while also allowing the company to reinvest in growth.
Dividend Growth and Safety
Investors who prioritize dividend growth will find Bank OZK’s track record compelling. The company has a long history of raising dividends at a healthy clip, with a five-year compound annual growth rate of around 11 percent.
A low payout ratio is one of the strongest indicators of dividend safety, and at just 26 percent, OZK’s dividend is well protected. The bank also boasts solid profitability, with a return on equity of 13.21 percent, reflecting strong capital efficiency.
Earnings growth is another important factor when evaluating a dividend stock. The bank posted four percent year-over-year earnings growth, further reinforcing its ability to continue increasing its dividend payments. As long as earnings remain stable and the bank’s loan portfolio performs well, there’s little reason to worry about the sustainability of these payouts.
Chart Analysis
Price Action and Trend
The price of Bank OZK has been in a downward move recently, pulling back sharply from its previous highs above 50. The stock closed at 44.61, which places it right near its 200-day moving average (blue line). This level is often seen as a key support area, and how the price reacts here could be crucial in determining the next move.
The 50-day moving average (orange line) remains above the 200-day moving average, suggesting the stock had been in an uptrend, but the recent dip has created some uncertainty. If the price continues to decline and breaks below the 200-day moving average convincingly, it could indicate a shift toward a more bearish trend.
Volume and Market Participation
Volume has been moderate, with 758,055 shares traded on the most recent day. There were several notable volume spikes in past months, particularly in June and again in late October, both times coinciding with sharp price moves. These spikes often indicate increased institutional activity.
The most recent price drop does not appear to be accompanied by a major surge in volume, which could suggest a controlled pullback rather than a panic-driven selloff. However, if volume picks up while the price continues downward, it may signal stronger selling pressure.
Relative Strength Index (RSI)
Looking at the RSI, the stock was in overbought territory earlier this year but has since cooled off significantly. The RSI now sits closer to the lower range, indicating that the stock is moving toward an oversold condition. If it dips further below 30, it may suggest that the selling momentum is overextended, which could lead to a potential bounce.
On the other hand, if the RSI stays weak and does not rebound, it could mean that sellers remain in control and that further downside is possible.
Moving Average Interaction
The relationship between the 50-day and 200-day moving averages is something to watch. The stock was comfortably above both moving averages just a few weeks ago, but the price has now tested the 200-day moving average. If it fails to hold, the next support zone could be around 42. If the 50-day moving average starts to roll over and heads toward a bearish crossover with the 200-day, it could confirm a longer-term trend shift to the downside.
Support and Resistance Levels
There is clear support around the 44.50 level, which aligns with the 200-day moving average. If this level holds, the stock may attempt to bounce back toward the 47-48 range, where the 50-day moving average currently sits.
On the flip side, if the stock breaks lower, the next area of interest is around 42, a level that previously acted as resistance and could now turn into support. Below that, the 40 level would be a key psychological area to watch.
Recent Candlestick Behavior
The last five trading days show a pattern of selling pressure, with multiple sessions where the stock attempted to recover intraday but failed to hold its highs. This suggests that there is some hesitation among buyers at the moment. The wicks on recent candles indicate that the stock has been trying to find support, but the downward momentum remains intact.
If a reversal is coming, the ideal signal would be a strong bullish candle with high volume, showing that buyers are stepping back in. Until then, the current trend leans toward weakness, and traders will likely be watching how the stock behaves at these key support levels.
Analyst Ratings
Upgrades
📈 Wells Fargo upgraded Bank OZK from Sell to Hold on January 21, 2025, raising its price target from $40 to $48. Analysts pointed to the bank’s improving earnings performance and a more optimistic outlook on its loan portfolio. Recent financial reports showed strong net interest margins and disciplined expense management, which contributed to the upgrade.
💰 Stephens & Co. maintained a Hold rating but adjusted its price target upward from $53 to $57. The firm expressed confidence in Bank OZK’s ability to navigate the current interest rate environment while continuing to grow its commercial lending portfolio. Analysts also noted the bank’s history of consistent dividend increases as a positive factor in their valuation.
Downgrades
⚠️ Raymond James downgraded Bank OZK from Buy to Hold on September 17, 2024, citing concerns over its exposure to commercial real estate. With uncertainties in that sector, the firm suggested that the bank could face increased risk if property valuations decline or loan defaults rise. Although OZK has historically managed risk well, analysts believe the near-term environment presents potential headwinds.
📉 Citigroup took a more bearish stance, cutting its rating from Buy to Sell on May 29, 2024, and lowering its price target to $37. Analysts pointed to slowing loan growth and increased competition from larger banks as reasons for the downgrade. They also expressed concerns about potential pressure on net interest income if interest rates shift in a less favorable direction.
📊 The current consensus price target for Bank OZK stands at $54.00, with estimates ranging from a low of $37.00 to a high of $65.00. The mixed ratings reflect both confidence in the bank’s profitability and caution regarding potential risks in commercial lending markets.
Earnings Report Summary
Bank OZK just released its latest earnings, and overall, it was another solid quarter. The bank continues to show strength in its financials, delivering steady growth while keeping risks in check.
Fourth Quarter Highlights
Earnings per share came in at $1.56, beating expectations of $1.44. That’s a 4% increase from the same period last year, which is always a good sign for investors. Net income was strong, with $700.3 million reported for the full year, reinforcing the bank’s ability to generate solid profits.
Revenue for the quarter hit $412.34 million, which was slightly ahead of what analysts were predicting. Year-over-year, revenue growth wasn’t dramatic, but the steady climb shows that OZK is managing its business well in a tough banking environment.
Full-Year Performance
Looking at the bigger picture, total assets climbed to $38.26 billion, which signals steady expansion. Loans stood at $29.97 billion, and deposits were slightly higher at $31.04 billion. That’s a good balance, showing that the bank has plenty of funding to support its lending business without taking on unnecessary risks.
Keeping Costs in Check
One thing Bank OZK does well is managing expenses. Its efficiency ratio remains competitive, meaning it’s keeping operations lean while still growing. For a regional bank, this is a key factor in maintaining strong profitability.
Loan Quality and Capital Strength
No big surprises when it comes to asset quality—loan defaults and non-performing assets remain low. That’s exactly what you want to see from a bank that focuses heavily on commercial real estate lending. On the capital side, OZK is well-positioned to handle any market volatility, with strong reserves and a conservative approach to risk.
Looking Ahead
The bank’s management team is optimistic about the future, pointing to a strong loan pipeline and continued focus on shareholder value. While the banking sector has its challenges, OZK’s steady financials and history of careful risk management give it a solid foundation heading into the next quarter. Investors will be watching how interest rates and economic trends play out, but for now, the numbers suggest that Bank OZK is on solid ground.
Financial Health and Stability
Bank OZK has demonstrated resilience over the years by maintaining a strong balance sheet and disciplined lending practices.
Net income currently stands at 700 million dollars, with a profit margin of 48.37 percent. These figures highlight the bank’s ability to generate steady earnings, which is crucial for long-term dividend stability.
On the balance sheet side, the bank holds a cash position of 2.78 billion dollars against total debt of 947 million. With a book value per share of 47.30, the stock is currently trading near its tangible worth, suggesting that it is fairly priced based on its assets.
Debt levels remain manageable, which provides additional reassurance that the company can weather economic cycles while continuing to pay and raise its dividend.
Valuation and Stock Performance
Bank OZK’s current price of 44.83 dollars places it at a price-to-earnings ratio of 7.39, which is relatively low compared to broader market averages. Its price-to-book ratio sits just below one, meaning the stock is trading close to its tangible asset value.
Over the past year, the stock has seen some volatility, moving within a range of 37.43 to 53.64. Its 50-day moving average of 47.88 suggests the stock has pulled back recently, potentially offering a more attractive valuation for long-term investors.
Although OZK has lagged broader market indices, it remains a strong option for those seeking dividend income rather than high-growth potential.
Risks and Considerations
While Bank OZK has many strengths, it’s important to recognize potential risks.
A significant portion of its loan book is tied to commercial real estate, a sector that has faced challenges in recent years. Any deterioration in this market could put pressure on the bank’s earnings and, in turn, its ability to sustain dividend growth.
Like all banks, OZK is also exposed to interest rate fluctuations. A drop in rates could compress its net interest margin, which is a key driver of profitability.
Additionally, the stock currently has a short interest of nearly 16 percent, meaning a notable number of investors are betting against it. While this does not necessarily signal trouble, it’s worth monitoring as a potential red flag.
Final Thoughts
For dividend-focused investors, Bank OZK presents a compelling opportunity. Its consistent track record of dividend growth, strong profitability, and disciplined risk management make it a solid choice for those seeking reliable income.
While there are risks to consider, such as commercial real estate exposure and interest rate movements, the bank’s conservative payout ratio and strong balance sheet provide a cushion against economic headwinds.
With a steady income stream and room for future growth, OZK remains an interesting stock for those looking to build a dividend-focused portfolio.
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