The long-term chart (at right, click to enlarge) shows that CORS has enjoyed excellent growth in relation to the S&P 500, though with considerably more volatility (the beta of the shares is 1.31). The company is still relatively small with a market cap of 1.31B. CORS has increased the dividend each year for the last 30 years, and they have increased it 25% this year. The current yield of the shares is 4.87%, but the payout ratio is only 24%. There were 2-for-1 stock splits in 1995, 2003, and in May 2006, when CORS reached its all-time high share price of 33.08. But the shares recently posted a 52-week low of 19.77, which represents a 40% discount to the high price achieved last May.
The bank’s website is attractive, easy to use, and contains plenty of information for prospective investors. The company reported their third quarter earnings on Oct. 17. Despite widespread nationwide weakness in the mortgage lending industry, the company’s earnings were up 28% for the quarter, up 44% year-to-date, and return on equity exceeded 25%. However, pending loans in the pipeline have decreased by 26% so it will be difficult to sustain the earnings growth rate going forward.
Corus also admits that the housing market slowdown is impacting on the credit quality of existing loans, but they claim their loans have been underwritten conservatively and they feel the risk of defaults is low.
The short-term chart shows CORS hovering just above the 52-week lows after making a possible double bottom. CORS’s bear market does appear to be losing momentum and I will be looking to go long when I see some signs of strength.