In the hustle and bustle of searching for investor value, regional banks can be easily overlooked and forgotten. However there are two regional banks from the northeast that could be of value to investors looking for stable dividend plays to add to their portfolios.
Value For Investors
Valley National Bancorp (VLY) is a moderately sized regional bank located in New York, and New Jersey. With 210 locations spread between the two states, the bank has a substantial regional presence. Within the northeast region, VLY paid the highest dividend amongst its regional peers at 6.7% annually. Investors should look to the following reasons as rationale for this dividend play.
VLY has a price-to-earnings ratio of 13.54, which is well below the average within the northeast region. The highest price-to-earnings ratio of 79.85 belongs to Peoples Federal Bancshares (PEOP) while the lowest price-to-earnings ratio of 8.37 belongs to Horizon Bancorp (HBNC).
VLY has consistently paid its dividend at the same rate for the last four quarters. In this case the dividend was $0.1625 per share and last paid on 3/13/13.
VLY is trading at $9.86 per share (at time of writing), well below the 52-week high of $12.45 per share.
VLY demonstrated an improvement in its financial position as demonstrated by the data in the chart below. Year over year VLY was able to increase its net income, cash position and total assets by moderate amounts.
*Amounts in thousands
Trustco Bank Corp NY (TRST) is a mid-sized regional bank with 138 offices in New York, Massachusetts, New Jersey, Vermont, and Florida. TRST pays a slightly less hefty dividend of 4.90%. The dividend is still tops amongst many peers within the northeast reason. Investors should look to the following reasons a rationale for investing in TRST.
TRST has a price-to-earnings ratio of 13.27. Like VLY this ratio is well below the average price-to-earnings ratio within the northeast region.
TRST has consistently paid a dividend for the last 11 quarters. In this case the dividend was $0.0656 per quarter and was last paid on 2/27/13.
TRST recently reported that earnings for the year 2012 were up 13% year over year. The bank has stated that this is a result in an increase in profitable accounts for both loans and deposits.
TRST is trading at $5.31 per share (at time of writing), just below the 52-week high of $6.00 per share.
TRST has shown strong improvements with regards to its year-over-year financial position, specifically with regards to net income and total assets, as listed below:
*Amounts in thousands
Investors should find security in both stocks as they look for safe dividend plays for their portfolios. Both VLY and TRST have demonstrated their worth through reasonable price-to-earnings ratios that are below the average of their industry peers. This suggests that both companies are not greatly overvalued by the market and other investors. Both VLY and TRST have demonstrated a recent history of dividend stability that both banks can support as a result of improved year-over-year financial positions. Additionally, both banks are trading at prices below 52-week highs, which may enable safer entry points for cautious investors. Finally, improved earnings help substantiate the need for investors to consider these two stocks.
Additional disclosure: One should also conduct their own due diligence before making investment decisions.