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New York Community Bancorp: Multiple Margin Headwinds, Overvaluation, Dividends At Risk

Published Thu, 23 Nov 2017 09:16:41 -0500 on Seeking Alpha

Ian Bezek recently shared his bullish thesis on New York Community Bancorp (NYCB). It’s always a pleasure reading Ian’s well-researched articles and he made a strong case for NYCB. We have great respect for Ian and we do share similar views on quite a few stocks. However, in this instance, our position is contrary to Ian's one. As such, we think it’s important to present our alternative view on NYCB, especially given that the stock has been on our radars for quite a long time now.
At first glance, NYCB appears to be a hidden gem for both value investors and yield seekers. With its massive underperformance against other regional banks, outstanding asset quality metrics, a 5.3% dividend yield and potential benefits from a looser regulatory environment, the stock looks like a screaming buy. Moreover, we opened a long position in NYCB when Jerome Powell became the clear favorite to be the next Fed chair as he is much more supportive of financial deregulation than Ms. Yellen. That being said, we sold the stock last week after it spiked on the announcement of the $250B SIFI threshold. That was a short-term trade, after which we've started digging deeper into NYCB to find out if there is still longer-term value in the stock.
As always, the devil is in the details. In this article, we argue that NYCB is facing multiple headwinds, including margin pressure, sluggish loan growth, weak capital generation and funding-related issues. While its yield is attractive,... 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
Last Chance To Pick Up This 5.3% Yielder On The Cheap
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