NEW YORK (TheStreet) -- With investors concerned over a recent dividend cut by Hudson City Bancorp (HCBK) and a high first-quarter dividend payout ratio for New York Community Bancorp (NYB), TheStreet has identified a group of 10 bank stocks with decent dividend yields and relatively low payout ratios.
After regulators forced Hudson City Bancorp to restructure its balance sheet as the company's long-term leverage strategy of borrowing from the Federal Home Loan Bank of New Yorkand investing the proceeds in securities backfired in a prolonged low-rate environment, the company announced a first-quarter net loss of $555.6 million and reduced its quarterly dividend to 8 cents a share, from 15 cents a share.
The Wall Street Journal on Monday discussed New York Community Bancorp's attractive dividend yield of 6.2% in its Heard On The Street Column, saying investors were concerned over the bank's first-quarter payout ratio, which TheStreet discussed on April 19, after the company reported first-quarter earnings of $123.2 million, or 28 cents a share, while paying a quarterly dividend of 25 cents a share.
In order to come up with a list of 10 bank stocks with attractive dividend payouts that are well-supported by earnings, we isolated the 10 holding companies with the highest forward dividend yields, that also paid out less than half of their earnings for the previous five quarters.All data was provided by SNL Financial, and we only included names with three-month average daily trading volume of more than 50,000 shares. In addition to excluding New York Community Bancorp, this conservative approach excludes many of investors' other favorite bank stocks with generous dividend payouts, including , Valley National Bancorp (VLY), with a dividend yield of 5.08%, based on a quarterly payout of 17 cents and Monday's closing price of 13.51; People's United Financial (PBCT), with a dividend yield of 4.74%, based on a 16-cent quarterly dividend and Monday's closing price of $13.30; and First Niagara Financial (FNFG), with a dividend yield 4.69%, based on a 16-cent quarterly dividend and Monday's closing price of $13.66. Here are our ten conservative bank dividend stock selections:
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV