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Bank of Ozarks Hikes Dividend: Should You Buy It Now?

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Bank of the Ozarks, Inc.OZRK has again raised its quarterly dividend. The company announced a quarterly cash dividend of 14.5 cents per share, representing a 3.6% rise over the prior payout. The dividend will be paid on Oct 23 to shareholders of record as of Oct 16.

This marks the 21st consecutive quarter of dividend rise for Bank of the Ozarks. Further, this reflects the company's strong balance sheet position.

What Should Investors Do?

Though Bank of the Ozarks raises dividend every quarter and has strong fundamentals, investors should take into consideration the following metrics before taking any decision:

Earnings Strength: Bank of the Ozarks depicts stable earnings. In the trailing four quarters, the company has surpassed the Zacks Consensus Estimate thrice, with an average beat of 2.24%. Moreover, the company's earnings are projected to grow at the rate of 35.53% for 2015 compared with 13.54% for the industry.

Revenue Growth: Organic growth remains solid at Bank of the Ozarks. Revenues grew at a CAGR of 13.3% over the last 5 years (2010-2014), with the uptrend continuing in first-half 2015 as well. The company's projected sales growth (F1/F0) of 36.52% ensures continuation of the upward trend in revenues.

Leverage: Bank of the Ozarks' debt/equity ratio stands at 0.23 compared with the industry average of 0.34, indicating lower debt level relative to the industry.

Share Price Movement: At the time when stock prices of several banks are treading the negative territory owing to equity market turmoil, Bank of the Ozarks reflects an attractive year-to-date return of 15.11%.

Dividend Yield: Bank of the Ozarks' dividend yield stands at 1.28% considering last day's closing price of $43.65. Though the yield is not quite attractive for income investors, it can be considered as a steady stream of income.

Price-to-Earnings Ratio: Bank of the Ozarks' P/E ratio of 21.13 stands above the industry average of 15.28. This makes the stock overvalued.

Value Score: Bank of the Ozarks has a Value Style Score of 'F'. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores 'A' or 'B', when combined with Zacks Rank of #1 (Strong Buy) or #2 (Buy), offer the best upside potential.

Zacks Rank: Bank of the Ozarks currently carries a Zacks Rank #3 (Hold). This is because over the last 30 days, the Zacks Consensus Estimates for the stock remained unchanged for both 2015 and 2016.

Stocks Worth A Look

Some Southeast banks worth considering include Popular, Inc. BPOP , FCB Financial Holdings, Inc. FCB and Triumph Bancorp, Inc. TBK . All these stocks hold a Zacks Rank #2.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

POPULAR INC (BPOP): Free Stock Analysis Report

BANK OZARKS (OZRK): Free Stock Analysis Report

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TRIUMPH BANCORP (TBK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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