Portfolio Update
The FiveTwenty portfolio received $104.08 in dividends in the past week. PEP and TROW paid their quarterly dividends during the week.
| Past Week Dividend | $104.08 |
| Current Quarter Dividend (Q1 2023) | $2,065.14 |
| LifeTime Dividend | $10,173.58 |
| Estimated Annual Dividend | $8,721.50 |
The capital allocation for the week of 04/02/2022 to 04/08/2022 will be used to add to our position in Bank OZK (NASDAQ: OZK).
OZK – Position Update
Since our last check-in on OZK in week 41 of 2021, the company reported FY 2021 earnings on 01/20/2023, and FY 2022 earnings on 01/19/2023. In addition, the share price decreased 22.4% from $44.09 to $34.20.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 27 years | 25 years | |
| Yield | 3.80% | 2.53% | 1.55% |
| Payout Ratio | 28.63% | 27.5% | 27% |
| P/E | 7.53 | 10.83 | 14.95 |
FY 2022 earnings report
Did OZK’s latest earnings report raise any warning flags?
For FY 2022, OZK reported a decrease in net income of 5.5% and an increase in EPS of 1.6% compared to 2021. A major contributor to these results was a $83.5 million provision for credit losses for 2022 compared to a negative provision for credit losses of $77.9 million for 2021. On the other hand, pre-tax and pre-provision net revenue (PPNR) was $805 million for 2022 compared to $675 million for 2021 an increase of 19.3%.
| Revenue (in millions) | Net Income (in millions) | EPS . | |
| 2021 | – | $579 | $4.47 |
| 2022 | – | $547 | $4.54 |
| % Change | – | (5.5)% | 1.6% |
Additional noteworthy developments during the quarter:
- On 03/01/2023, OZK declared a dividend of $0.34 per share, a 3.03% increase from the previous quarter, payable on 01/24/2023 to shareholders of record as of 01/27/2023.
Thesis
Why are we adding to our position in OZK?
OZK had a solid FY 2022 with no red flags showing up in any of its financial reports.
Following the failure of Silicone Valley Bank and Signature Bank, OZK’s share price has dropped considerably. We are using this pullback in the share price to build our position. We will also keep a close eye on Q1 2023 earnings report for any signs of distress.
Previous Articles
Additional Research
- 3 Bank Stocks to Buy After the Silicon Valley Bank Failure | Nasdaq
- OZK 2023-01-23 (suredividend.com)
Photo by Towfiqu barbhuiya on Unsplash
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