As an income-driven investor, one of the first things I tend to keep an eye on is a company's dividend-related news and whether or not that news is positive or negative. If the news is positive, there's more of a chance I keep that particular company on my radar. If the news is negative, there's less of a chance that I put that particular company on my radar. With that said, and in the wake of its latest dividend increase, I wanted to highlight several reasons why I've chosen to stay bullish on shares of Bank of the Ozarks (NASDAQ:OZRK).
Recent Dividend Behavior
On Wednesday, July 2, Bank of the Ozarks announced a quarterly dividend increase of $0.005/share, which brings its upcoming dividend payout to $0.12/share. It should be noted that the increase will be paid on July 18 for shareholders on record as of July 11. This boost represents a 4.3% increase from its prior dividend of $0.115/share, which was paid to shareholders on June 16. Comparably speaking, Bank of the Ozarks's most recent increase was in-line with its previous increase of $0.005/share (calculated on a post-split adjusted basis) that was announced on April 1, 2014.
Based on the company's dividend behavior over the last 12 months, it should come as no surprise that I foresee its next quarterly dividend hike, which I estimate to take place in mid-October 2014 to be at least $0.005/share but no more than $0.015/share.
Upcoming Earnings Outlook
When it comes to the company's upcoming earnings, there are a number of things potential investors should consider. For example, analysts are currently calling for OZRK to earn $0.33/share in terms of EPS for its Q2 earnings that are due out on July 7 (which is $0.01/share lower, on a post-split adjusted basis, than what the company had reported during Q1 2014, and $0.005/share higher, on a post-split adjusted basis, than the company had reported during the year-ago period).
In order to meet and/or exceed its quarterly EPS estimates, I'd like to see an increase in the company's net income (within the range of at least 3.0% on the low side and 5.0% or more on the high side), a fair increase in the company's loans and leases (within the range of 4.5% on the low side and 6.0% or more on the high side), and lastly, an increase in the total assets (in this instance, I'm looking for an increase of at least a 3.5% on the low side and a 5.5% or more increase on the high side). If the above mentioned criteria are met and or exceeded, there's a very good chance that current EPS estimates could be surpassed.
For those of you who may be considering a position in the Bank of the Ozarks, I strongly recommend keeping a close eye on the company's recent dividend behavior which has demonstrated a solid uptrend over the last year and its ability to demonstrate reasonable increases in its net income, its loans and leases and its total assets as each of these segments will fuel future earnings growth.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.