OZKAP - Bank OZK: I'm Adding 7.1% Yielding Preferred Shares To My Portfolio

2024-02-13 10:30:00 ET

Summary

• Bank OZK's preferred shares are trading at a discount of over 30% and currently yield just over 7.1%.
• The bank's Q4 results show that the preferred dividends are well covered by a factor of over 4,000%.
• Bank OZK's balance sheet and risk management strategies indicate that it is navigating through risks well, particularly in the real estate segment.

Introduction

Although I generally don’t like non-cumulative preferred shares, I do own some preferred share issues by banks. One of my relatively larger positions (among the non-cumulative issues) is the sole preferred share series issued by Bank OZK ( OZK ). That stock is trading with ( OZKAP ) as a ticker symbol. The preferred shares pay a quarterly dividend of $0.289 per share, and as the stock is trading at a discount of over 30% compared to its par value of $25/share, the preferred shares are currently yielding just over 7.1%....

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