S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan

3 high-yielding, small banks to buy on the dip

Key Points

  • Bank OZK is a 3.25% yielding stock trading below 9x earnings with growth forecasted for 2024. 
  • Valley National Bancorp has a 4.3% yield and should return to top- and bottom-line growth by the end of the year. 
  • Cadence Bank is fairly valued relative to the sector and pays a 3.3% yield, with dividend growth expected in Q1 2024. 
  • 5 stocks we like better than Bank OZK

Building and sign bank; learn more about bank stocks to buy on the dip

Results from the big banks have the financial sector on the cusp of a correction. The news isn't bad, but strengths were priced into the market, setting it up for a healthy and needed reset. The takeaway from the data is that business remains sound, the consumer is resilient and cash flow is ample. 

What this means for the smaller regional banks is the same, and with the FOMC set to start cutting rates this year, they may see business accelerate by year-end. 

In this light, today's correction is tomorrow's buying opportunity, and there are capital returns to consider. These stocks trade at values relative to the broad market and the sector while paying 3.25% to 4.3% in yield. 

Bank OZK: An aggressive dividend-growing stock

Bank OZK NASDAQ: OZK, formerly known as Bank of the Ozarks, is a Little Rock-based financial institution serving retail and commercial clients in the region. The company is among the lower-valued bank stocks trading 8x earnings and among the most aggressive dividend growers. 

This company has increased its annual payment for 26 years and runs a 12% CAGR. The aggressive part is that it tends to increase sequentially quarterly, offering a substantial tailwind for the market. The payout ratio is only 25%, so there is cause to believe this trend will continue.  

The analysts' activity is noteworthy. Analysts trimmed their price targets in early 2023 when the banking crisis unfolded, but the action looks like a mere blip on the radar. Since then, analysts have maintained a steady "hold" rating and increased their price targets in Q3 and Q4. The consensus is now above its level at the start of 2023, suggesting upward pressure for the stock price, although it is trading in alignment with consensus now. 

Highlights from the Q3 release include a 10% credit reserve build, above consensus NII, and better-than-expected earnings aided by lower costs. Loans were up 7% for the quarter, and Q4 should be the strongest of the year. Analysts have been upping their estimates for Q4, but the bar is still low. Contrary to current trends and industry results, the consensus figure expects only 10% growth. 

Valley National Bancorp has a solid 4% yield

Valley National Bancorp NASDAQ: VLY is a regional operator based in New York. The stock is capitalized at over $5 billion and comes with a 4.3% yield, with shares trading near the middle of the multi-year range. The payout isn't growing like Bank OZK, but it has been steady and stable for nearly a decade and comes with an equally low payout ratio and reliability outlook. 


Revenue and earnings are contracting at the end of F2023 and should contract in the first half of this year, but a trough is in sight. Growth should resume by the end of the fiscal year and help sustain the capital return outlook.

Analysts are less favorable toward this stock than OZK, but a bottom may be in sight. Sentiment slipped to "hold" from "moderate buy" in 2023, and the consensus price target is falling, but a catalyst may emerge in the Q4 results. Not only has the bar been set low, but turn-around efforts begun at the end of 2022 and early 2023 should begin to show. 

Cadence Bank analysts upping their targets

Cadence Bank NYSE: CADE is a regional operator in the southeastern U.S. The company is among the higher-valued banks at nearly 12x its earnings, but it is producing, and the analysts like it. The 12x valuation comes with a 3.3% yield and an outlook for distribution growth that should be affirmed when the company reports Q4 results. As it is, Cadence Bank has made five consecutive annual increases and pays only 35% of its earnings with a return to growth in the forecast. 

Analysts expect Q4 results to be the trough in performance weakness and have set the bar low. That said, the nine analysts tracked by MarketBeat rate this stock a consensus "buy" and started raising their price targets at the end of the year. A price pullback to the $26 level would align the action with the consensus figure; the most recent price target, set in the first week of 2024, is the new high of $35 or about 25% above the current action.  

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in Bank OZK right now?

Before you consider Bank OZK, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Bank OZK wasn't on the list.

While Bank OZK currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

13 Stocks Institutional Investors Won't Stop Buying Cover

Which stocks are major institutional investors including hedge funds and endowments buying in today's market? Click the link below and we'll send you MarketBeat's list of thirteen stocks that institutional investors are buying up as quickly as they can.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Cadence Bank (CADE)
3.2585 of 5 stars
$27.49-0.7%3.64%9.45Moderate Buy$28.13
Valley National Bancorp (VLY)
4.4125 of 5 stars
$8.02-2.1%5.49%8.44Hold$10.33
Bank OZK (OZK)
3.413 of 5 stars
$43.35-1.0%3.51%7.39Hold$46.50
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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3 High-Yielding, Small Banks to Buy on the Dip

3 High-Yielding, Small Banks to Buy on the Dip

Results from big banks have the financial sector on the cusp of a correction. The takeaway is that business remains sound, the consumer is resilient and cash flow is ample.

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