I am getting cautious here after the recent run we have had in the last few months. One of the few areas I am still putting new money into is high-dividend stocks with reasonable valuations. One I really like at these price levels is New York Community Bancorp. (NYB).
New York Community Bancorp - "New York Community Bancorp, Inc. operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank, which offer banking products and services in New York, New Jersey, Ohio, Florida, and Arizona. It primarily engages in generating deposits and originating loans." (Business Description from Yahoo Finance).
7 Reasons to pick up NYB at under $13 a share:
- NYB is a solid regional bank with a huge 7.7% dividend yield.
- It is selling at the bottom of its five-year valuation range based on P/B, P/E, P/S and P/CF.
- Credit Suisse has an "outperform" rating and a $17 price target on NYB. The firm also expects $1.50 in earnings per share by FY2014.
- Despite its large dividend, it trades at just over book value and under 12 times forward earnings.
- The stock looks like it has bottomed and just crossed its 100-day moving average (See Chart - click to expand)
- Non performing loans fell 37% in the last earnings report and the stock sells for less than 6 times operating cash flow.
- It's one of the few banks that actually increased earnings over the past five years, NYB increased EPS by just under 4% annually over the last half decade.
Disclosure: I am long NYB.