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Recently, we compiled a list of the top 30 US Financial stocks and showed that high dividend yielding financials have performed better than low dividend yielding financials in the last 52-week period. The highest dividend financial stocks gave especially good returns to its investors in this period.

On the other hand, the overall financial sector didn’t generally display spectacular performances in the past 12 months. Within the financial sector, there were underperforming industries such as Savings & Loans, in which the stocks generally performed worse than the overall market last year.

We believe investing in the high dividend yielding stocks can still be beneficial for investors of such underperforming industries. In down markets, defensive investing in high dividend stocks provides better protection. Moreover, we are concerned about the Fed’s inflationary monetary policy, and we think investors should pick defensive stocks in order to protect themselves against inflation.

We compiled a list of top 30 Savings & Loans stocks (the sector classifications are sourced from Finviz) by market cap and ranked them based on their 12-month dividend yields. The top and bottom halves and their performances are shown below:

HIGHER DIVIDEND YIELDS

Dividend Yield

52-week Return

Capitol Federal Financial Inc.

CFFN

6.3%

-19.5%

New York Community Bancorp

NYB

6.2%

7.4%

Hudson City Bancorp

HCBK

5.7%

-25.7%

People's United Financial Inc.

PBCT

4.7%

-6.3%

First Niagara Financial Group

FNFG

4.7%

5.5%

Brookline Bancorp Inc.

BRKL

4.0%

-19.3%

Dime Community Bancshares Inc.

DCOM

3.9%

14.8%

Flushing Financial Corp.

FFIC

3.8%

-0.2%

Astoria Financial Corp.

AF

3.7%

-13.1%

Northwest Bancshares Inc.

NWBI

3.4%

4.2%

Provident Financial Services

PFS

3.2%

10.2%

Roma Financial Corp.

ROMA

3.0%

-12.6%

Provident New York Bancorp

PBNY

2.7%

-8.3%

OceanFirst Financial Corp.

OCFC

2.6%

10.8%

Berkshire Hills Bancorp Inc.

BHLB

2.3%

5.0%

AVERAGE

-3.1%

LOWER DIVIDEND YIELDS

Dividend Yield

52week

Clifton Savings Bancorp Inc.

CSBK

2.2%

13.0%

Kearney Financial Corp.

KRNY

2.2%

-9.9%

United Financial Bancorp

UBNK

2.0%

18.2%

Abington Bancorp Inc.

ABBC

1.9%

17.3%

Washington Federal Inc.

WFSL

1.4%

-18.3%

Banner Corporation

BANR

1.4%

-46.8%

Danvers Bancorp Inc.

DNBK

0.6%

37.4%

Columbia Banking System Inc.

COLB

0.6%

-20.4%

Fox Chase Bancorp Inc.

FXCB

0.3%

18.4%

Investors Bancorp Inc.

ISBC

0.0%

1.3%

Ocwen Financial Corp.

OCN

0.0%

2.7%

Sterling Financial Corp.

STSA

0.0%

-78.1%

Flagstar Bancorp Inc.

FBC

0.0%

-76.0%

Meridian Interstate Bancorp Inc.

EBSB

0.0%

15.2%

Center Financial Corportion

CLFC

0.0%

0.4%

AVERAGE

-8.4%

In the last 52-week period, both groups displayed negative performances. The average return of the 15 highest dividend yielding savings & loans stocks was -3.1%. The second group of 15 stocks with lower dividend yields underperformed the first group in the same period, returning -8.4% on average. As we expected, the defensive Savings & Loans stocks with high dividend yields provided better protection in a negative-return period.

Five savings & loans stocks with the highest dividend yields are as follows:

1. Capitol Federal Financial Inc. (NASDAQ:CFFN): Capitol Federal Financial Inc. is the holding company of Capitol Federal Savings Bank. CFFN has a dividend yield of 6.3% but lost 9.5% during the past 12 months. CFFN recently traded at $11.46. The stock has a market cap of $1.90B and P/E Ratio of 54.31. CFFN is one of David Einhorn’s favourite stock picks.

2. New York Community Bancorp (NYB): New York Community Bancorp is the holding company of New York Community Bank. NYB has an 6.2% dividend yield and returned 7.4% to its investors during the past 12 months. NYB recently traded at $16.26. The stock has a market cap of $7.11B and P/E ratio of 13.22. Irving Kahn’s Kahn Brothers and Scott Scher’s Covis Capital are among the hedge funds that are bullish about NYB.

3. Hudson City Bancorp (NASDAQ:HCBK): Hudson City Bancorp is the holding company of Hudson City Savings Bank. HCBK recently traded at $9.26 and has a 5.7% dividend yield. HCBK lost 25.7% during the past 12 months. The stock has a market cap of $4.57B.

4. People's United Financial Inc. (NASDAQ:PBCT): People's United Financial Inc. is the parent company of People’s United Bank. PBCT has a dividend yield of 4.7%, however it lost 6.3% during the past 12 months. The stock recently traded at $13.16. The stock has a market cap of $4.61B and P/E Ratio of 37.60

5. First Niagara Financial Group (NASDAQ:FNFG): First Niagara Financial Group is the parent company of First Niagara Bank. FNFG has a 4.7% dividend yield and traded at $13.72 recently. FNFG returned 5.5% during the past 12 months. The stock has a market cap of $2.83B and P/E ratio of 18.08. Ric Dillon’s Diamond Hill Capital, D.E. Shaw, and Charles Clough’s Clough Capital Partners had small investments in FNFG at the end of December.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 5 High Dividend Savings & Loans Providing Good Returns During a Difficult Period