Saturday, May 27, 9:26 pm EST. I recently wrote of UNH, and highly recommended it. I own some. It’s one of my core holdings. The reason is clear and simple… It’s a true safe-dividend grower. It pays an incredibly safe dividend. It’s a truly growing business, and it has been raising its dividend at a prodigious rate, such that years down the road, the yield could easily be in the double-digits for those who are holders of shares now. For me, it’s about as close to a set-it and forget-it holding I can think of.
My next best current idea is the Bank of the Ozarks, symbol, OZRK. Do check it out. Another incredibly safe-dividend grower, it meets my three principal criteria. The chart line of its 12-month, analysts’ estimate of forward-looking earnings estimates is a thing of beauty to behold. The chart of its dividend payout history is an ever-growing stair-step pattern of continual growth. It starts at $.10 a share 10 years ago, and has grown 7-fold, or 600%, to $.70 a share today. And, price reflects the safety and quality here, too; having moved from $7.27 a share 10 years ago, to $45.61 Friday. That’s more than 6-fold, 527% appreciation!
OZRK is paying a $.70 a share, 1.53% yield, but at its rate of annualized growth, will be returning lovely numbers in just a few short years down the road. Never buy on my say-so. Check it out in whatever trusted venue you employ, and ask yourself if it meets your requirements. I’ve taken a position, and may just never let it go. It just might get bought one day, by one of the much larger major national banks. If that should happen, expect it to get taken out at a nice premium to your purchase price.
Analysis I’m looking at indicates that it is on a 21% annual earnings growth path at this time, and a calculation of its value puts it at approximately $74 a share, while it is only currently trading at under $46.
By my calculation, if OZRK earns some $3.30 a share 12 months from now, the dividend only represents a payout of 21% of that projection. The payout ratio of current earnings is 25%… super-safe!
Bank of the Ozarks strikes me as an awesome investment for continued growth of a safe-dividend payout. I want INCOME in my retirement, and I want it growing to me at a very high rate… preferably in the inflation-beating teens. This one looks to keep on doing that for me for life.
Here’s to your successful investing!
Harold F Crowell