New York Community Bancorp: The Preferred Stock Looks Like A Good Bet After Q4 Earnings

Summary

• New York Community Bancorp has recently undergone a CEO change, a $1 billion capital raise, and started a turnaround plan to diversify loan risk and return to profitability.
• The pedigree of the new board and management is impressive.
• Dilution for common shareholders is the main problem, but NYCB preferred stock offers no dilution, ~9x the dividend yield, seniority to common equity, and a healthy discount to par.
• Consider investing in NYCB preferred stock for a 9.3% dividend yield and a 31% discount to par.

Spencer Platt

In February, I covered the chaos at New York Community Bancorp, Inc. (NYCB) after key risk and audit executives resigned, the bank reported a Q4 loss, and Moody's downgraded its credit. Fortunately for NYCB, an investor group led by former US Treasury

Analyst’s Disclosure:I/we have a beneficial long position in the shares of NYCB.PR.A either through stock ownership, options, or other derivatives. 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.