New York Community Buys Flagstar: I Support The Deal

Summary

  • NYCB announced a large acquisition Monday, buying Flagstar Bank.
  • Flagstar brings NYCB a national-scale mortgage lending business along with much-needed cheap deposits.
  • NYCB is maintaining its large dividend, and given that this is supposed to add 16% to earnings per share, may actually pave the way for future dividend hikes.
  • NYCB could rerate to being a growth bank now; shares have upside to at least $15 in addition to the generous yield.
  • Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More »

Flagstar Bank
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On Monday, New York Community Bancorp (NYCB) announced that it will be purchasing Flagstar (FBC) in an all-stock transaction. Flagstar is a fairly large bank, and as such, this is

This is an Ian's Insider Corner report published Monday morning for our service's subscribers as an instant analysis of the merger. If you enjoyed this, consider our service to enjoy access to similar initiation reports for all the new stocks that we buy. Membership also includes an active chat room, weekly updates, and my responses to your questions.

This article was written by

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Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.

Analyst’s Disclosure:I am/we are long NYCB, STL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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