This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

10 Bank Dividend Stocks: 2010 Roundup

8. People's United Financial

Company Profile

Shares of People's United Financial (PBCT - Get Report) of Bridgeport, Conn. closed at $14.01 Monday, down 12% year-to-date. Based on a quarterly payout of 16 cents, the shares have a dividend yield of 4.43%.

On December 1, People's United completed the acquisition of LSB Corp. for $94.8 million in cash. LSB held River Bank of North Andover, Mass., and had $780 million in total assets and seven branches.

On the same day, People's United also paid $56.4 million in cash and stock to acquire acquired Smithtown Bancorp of Hauppauge, N.Y., which had 31 branches and total assets of $2.3 billion.

These acquisitions followed the company's purchase of Financial Federal Corporation in February for $699 million in cash and stock. Financial Federal had $1.3 billion in total assets and specialized in collateralized lending and leasing to small businesses. People's United also purchased the failed Butler Bank of Lowell, Mass. from the Federal Deposit Insurance Corp. in April. Butler Bank had four branches and $268 million in assets.

Income Statement

Third-quarter net income was $24.1 million, or 7 cents a share, compared to $26.8 million, or 8 cents a share a year earlier. The third-quarter provision for loan losses was $21.8 million, increasing slightly from $21.5 million in the third quarter of 2009. Third-quarter results included $5.3 million in expenses related to the mergers and systems conversions, as well as other one-time charges.

The net interest margin was 3.73% during the third quarter, rising from 3.19% a year earlier.

With overall earnings performance suffering from the merger and conversion expenses and the provision for loan losses remaining at an elevated level, People's United's third-quarter ROA was a mediocre 0.44% and its dividend payout ratio was 221%, which was by far the highest payout ratio among the companies listed here. Then again, with a very strong capital war chest, a high payout ratio is not a concern for the company.

Balance Sheet

Total assets were $21.9 billion as of September 30. For main subsidiary People's United Bank, the nonperforming assets ratio was 1.85%, rising from 1.10% a year earlier. The banking subsidiary's the third-quarter net charge-off ratio was 057% and reserves covered 1.01% of total loans as of September 30.

The banking subsidiary's Tier 1 leverage ratio was 13.00% and the total risk-based capital ratio was 16.40% as of September 30. The holding company's tangible common equity ratio was a very strong 17.85% as of September 30 according to SNL Financial.

Stock Ratios

The shares trade for 1.4 times tangible book value according to SNL Financial and 25 times the 2011 consensus earnings estimate of 55 cents a share. The forward P/E declines to 19, based on the 2012 consensus earnings estimate of 75 cents a share.

Analyst Ratings

Out of 15 analysts covering People's United, eight rate the shares a buy, while the other seven analysts recommend investors hold the shares.

4 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BXS $22.67 0.00%
FNB $12.90 0.00%
FNFG $8.79 0.00%
HCBK $10.32 0.00%
PBCT $15.09 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs