By Josh Boomgaarden

The banking industry is rife with risk. From heightened regulatory scrutiny to capital shortfalls, numerous banks, whether local, national, international, or foreign, have seen their shares slide on risk events. That does not appear to be the case with New York Community Bancorp (NYB), a $5.8 billion multi-bank holding company with branches in New York, New Jersey, Ohio, Florida, and Arizona. It is the only banking stock of the 28 we follow to earn a Low Risk rating, and for good reason. As our analysis of a spectrum of 4 regional banks shows, NYB is well-capitalized, does not appear to be involved in any regulatory or legal proceedings, and has not been weighed down by underperforming loans. Further, NYB has a dividend yield greater than 7.5%. In our opinion, NYB has set itself apart from its peers in the regional banking industry.

The four companies used in

By John P. Gavin, CFA

There is a strong case to be made that Qualcomm (QCOM) has a material accounting risk that remains largely undiscounted despite the company having first disclosed elements of it over a year ago in November 2010. This could put investors at risk for a negative surprise in 2012.

According to Qualcomm filings, whistleblower allegations made to its audit committee in December 2009 triggered a formal SEC investigation in September 2010. The SEC investigation appears active-and-ongoing as of QCOM’s most recent disclosures. Amazingly, not one person has bothered to ask a single question about this exposure in any of the conference calls that took place since the matter was first disclosed.

In the balance of this note, I explain why Qualcomm’s accounting exposure should be viewed as a material risk. I also review the 6 most common disclosure tactics that we see public companies use, typically

D.I. Perspective : Based on an analysis of our 100 risk factors, Lorillard, Inc. (LO) carries the lowest risk among the 5 companies we cover in the cigarette industry. Our observations below break down each of the risk categories we regularly cover in addition to special risk factors we analyzed for purposes of this industry report.

Noteworthy Risk Factors

When we assess the risk carried by a company, we consider the number of individual risk factors associated with the company as well as the nature, context, timing, and severity of the risk factors. After analyzing each cigarette company, we concluded that LO has the most favorable risk profile. LO was the only company we rated Medium Risk - Positive Bias (only Low Risk is better). We rated the other 4 cigarette companies Medium Risk - Negative Bias (only High Risk is worse). The table below summarizes the risk factors