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Buy This 4% Yielding Bank Stock

Published Wed, 01 Nov 2017 21:38:46 -0400 on Seeking Alpha

Investment thesis: New York Community Bancorp Inc. (NYCB) is a Buy for moderate investors seeking equity income
Financial Statement Analysis Profitability
The bank has been a consistent performer over the years, with 2015 being a lone blemish in an otherwise great investment profile. That year they faced six class action lawsuits and paid out three times as much interest expense under "borrowed funds" on their P/L. While the legal battle is still being fought, the worst of it seems to be behind them and puts the company in a great financial position moving forward.

(Source: Original Image - Data from NYCB 2016 Annual Report)
Quality and Performance of Loan Portfolio While the bank's loans aren't as profitable as the national average (3.13 NIM), this can be explained by their conservative underwriting standards (Max LTV of 65% for secured loans). Furthermore, non-performing loans have decreased over time and currently stand at .48% of total loans. Another positive observation is that the bank is only levered 10X.

Examining the Dividend While a 4% current yield is above average for today's low interest rate environment, analysis shows that prior years' dividends were in tenuous positions before finally being cut last year. The dividend is much better established now as evidenced by the metrics below. In particular, I'd like to point out the 33% plowback ratio to show management's commitment to... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NEW YORK COMM BANCORP 13.14   17.1 0.77 0.68 5.31


Older articles featuring New York Comm Bancorp (NYCB):
New York Community Bank: This 5.8% Yielder's Catalyst Has Arrived
New York Community Bancorp: A High-Yield Value Trap
New York Community Bancorp: Multiple Margin Headwinds, Overvaluation, Dividends At Risk
Last Chance To Pick Up This 5.3% Yielder On The Cheap
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