Eye on Colonial Bancgroup

Colonial Bancgroup (CNB) provides commercial banking services from 301 branch offices in Florida, Alabama, Georgia, Texas, and Nevada. In addition to the usual banking activities, CNB engages in full service and discount brokerage; holds interests in residential and commercial real estate developments located in Atlanta and San Antonio; sells insurance products and annuities; provides investment advisory services; and owns and manages certain real estate loans.

The long-term chart shows an excellent picture of long-term growth far surpassing the S&P500, but with less volatility - CNB’s beta is only .63. With a current market cap of 3.61B, the company still has plenty of room to grow too.

CNB shares reached an all-time high of 26.90 last June, but since then they have retreated 13%, despite rising earnings, and CNB stock just made a new 52-week low November 6. The shares are yielding 2.83% with a payout ratio of 40%.

According to the company’s website, which is reminiscent of yahoo.com in its appearance and comprehensiveness of information, the dividend has been increased steadily over time, at a rate outpacing inflation; but the dividend has not been increased every year. There were 2-for-1 stock splits in 1997 and in 1998.

CNB appears appealing as a core portfolio holding, especially if the price comes down a tad more in the next few weeks.