NEW YORK (
TheStreet) -- We highlighted three bank stocks in November that offered
strong dividends and stable performance. Despite recent gains among bank stocks, these companies remain good long-term plays.
Capital Federal Financial
(CFFN - Get Report),
(UBSI - Get Report) and
New York Community Bancorp
(NYB) have climbed at least 14% this year, outperforming the 11% advance of the
S&P 500 Financial Sector Index.
Bank stocks have doubled the performance of the broader market this year as companies such as
Wells Fargo and
JPMorgan Chase return to growth. These smaller rivals offer better-than-average credit quality and steady earnings.
Capitol Federal Financial
Shares of Capital Federal have increased 20% this year. The Topeka, Kan., thrift is organized as a mutual holding company, with only 29% of its shares held by the public. These shares are known as "public shares," while the remaining common shares are controlled by the mutual holding company. The mutual holding company generally waives its dividends, only collecting payments when they're needed to cover operating expenses.
Capital Federal boosted its fiscal first-quarter earnings 32% to $21 million, or 99 cents per public share, its best quarterly performance during 2009. Dividends paid out during the fourth quarter totaled 79 cents a share, including a 29-cent special dividend.
Its main subsidiary,
Capital Federal Savings Bank
, is strongly capitalized, with a tier 1 leverage ratio of 10% and a total risk-based capital ratio of 24%. Capital ratios rose slightly during the fourth quarter, in line with a small decline in total assets, as Capital Federal lowered its interest rate risk by exchanging $194 million in fixed-rate mortgages with
for mortgage-backed securities, which the thrift sold for a $6.5 million gain.
Asset quality has remained strong, as nonperforming assets -- including loans whose payments are more than 90-days overdue and repossessed real estate -- comprised 0.4% of total assets as of Dec. 31. This compares with 3.3% industrywide, according to the Federal Deposit Insurance Corp.
Based on its regular quarterly dividend of 50 cents, Capitol Federal's shares yield 5.3% and are trading at 9.1 times its earnings. The public shares were trading for 2.9 times tangible book value, according to
In a report supporting his firm's initial "overweight" rating on the shares,
analyst Bruce Harting touted Capitol Federal's "best-in-class credit quality," stable deposit base and nine-year average dividend yield of more than 6%.