Bank of the Ozarks Inc (OZRK), Regions Financial Corporation (RF): Why This Bank Is Among the Best of the Breed

For some perspective on how Bank of the Ozarks’ 5.83% net interest margin compares to the industry, the graph below shows net interest margins of all U.S. Banks courtesy of the St. Louis Fed.

Dividends

Bank of the Ozarks provides its investors with a steady 1.6% dividend yield. That’s nothing amazing, but it’s a solid dividend yield that provides extra income while investors enjoy the stock’s ride higher. For comparison purposes, here are the dividend yields of the other aforementioned companies:

• Regions = 0.5%
• KeyCorp = 2.1%
• BB&T = 3.1%

So, Bank of the Ozarks comes out somewhere in the middle of its competitors on dividend yield. Not super, but not bad. If you’re going purely for yield, BB&T is the best way to go in this group. BB&T also provides some additional stability with its larger market cap of $21 billion.

However, I’d rather go for the total return that Bank of the Ozarks should continue to provide. Looking at Regions and KeyCorp, we need to see some growth drivers, otherwise there isn’t much hope for investing in these stocks other than a potential buy-out. Cost cutting only gets you so far.

Results

As you can see from the chart below, Bank of The Ozarks Inc (NASDAQ:OZRK) has been the All-Star over the past five years. BB&T has held its ground, but still hasn’t produced any long-term gains for investors. Regions Financial Corporation (NYSE:RF) and KeyCorp (NYSE:KEY) have yet to recover from the 2008 beating.

There are plenty of banks to invest in. Some are national, some are international, and other are regional. Regardless of the size and geography, investors should always look for a history of consistency and execution, in good times and in bad. Bank of the Ozarks gives you exactly that. Regardless of what’s happening in the economy, Bank of the Ozarks has weathered the storm and let its investors sleep at night. That’s why it was part of my 10 Stock Portfolio for 2013. This is a great long-term stock to own.

The article Why This Bank Is Among the Best of the Breed originally appeared on Fool.com.

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