This Day On The Street
Continue to site
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

10 Bank Dividends with Room to Rise

8. Cullen/Frost Bankers

Shares of Cullen/Frost Bankers (CFR - Get Report) of San Antonio closed at $58.19 Monday, returning 5% over the previous year. Based on a quarterly payout of 46 cents, the shares have a dividend yield of 3.16%. The dividend was increased by a penny on April 28.

First-quarter net income was $51.9 million, or 85 cents a share, increasing from $47.8 million, or 79 cents a share, during the first quarter of 2010. The provision for possible loan losses declined to $9.5 million during the first quarter from $13.6 million a year earlier. Net interest income increased 3% year-over-year to $141.8 million in the first quarter.

The net interest margin was 4.03% for the first quarter, increasing from.93% in the fourth quarter, but declining from 4.19% in the first quarter of 2010. The first-quarter ROA was 1.17%.

During the company's earnings conference call on April 27 following the earnings announcement, CEO Richard Evans warned that some lenders were returning to shoddy underwriting practices that led to the credit crisis, saying "It appears that some banks are at it again. In a period of historically low interest rates and very high liquidity, they're compromising sound lending practices in search of a higher return."

Following the earnings release, Michael Diana of Cantor Fitzgerald reiterated his buy rating on the shares with a $73 price target, saying that as the economy improves, his firm expects Cullen/Frost to report "a surge in net interest income," from "powerful loan growth, driven by Cullen/Frost's market share gains during the downturn," and a much higher net interest margin, "driven by asset sensitivity" in a rising rate environment.

The shares trade for 15 times the consensus 2012 earnings estimate of $3.84 a share, which is the highest valuation by this measure among the 10 banks listed here.

Diana is the only one out of 15 analysts covering Cullen/Frost to rate the shares a buy. Among the remaining analysts, 13 have neutral ratings and one analyst recommends selling 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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BOH $69.53 1.64%
CBU $39.90 0.83%
CFR $63.38 -0.95%
FFBC $19.60 0.51%
PFS $20.08 0.50%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs