The shares closed at $29.47 Thursday, declining 5% over the previous week, and down 14% year-to-date. Based on a quarterly payout of 24 cents, the shares have a dividend yield of 3.26%. The shares trade for 10.5 times the consensus 2012 EPS estimate of $2.65.
KBW analyst Jefferson Harralson points out that amid market worries over declining net interest margins - the difference between banks' average yield on loans and investments and their average cost for deposits and wholesale borrowings - Hancock Holding Company's margin "is about to expand," from an already-strong 4.15% in the second quarter to "to 4.40% or higher in 3Q as 0.18% in additional spread from accretable yield and 0.05% of benefit from the investment of excess liquidity drive the increase."
New York Community Bank
of Westbury closed at $12.80 Thursday, up 1% from a week earlier, but down 29% year-to-date, mainly on investor concerns over the company's high dividend payout ratio. The company earned 27 cents a share during the second quarter, while paying a 25-cent dividend. The stock's dividend yield is 7.81%.
Of course, we've seen similar pullbacks for New York Community Before, only to see the company maintain the dividend through thick and thin, as it continues to enjoy solid credit quality in its main lending market, focusing on loans collateralized by apartment houses that feature below-market rents in the New York City area.
The shares trade for just under 10 times the consensus 2012 EPS estimate of $1.21.
KBW analyst Matthew Clark says the company's dividend "should be safe," as the company is regulated by the Fed, FDIC and NY State and is not having to deal with the transition to a new regulator," like federally chartered thrifts, which are transitioning to the Office of the Comptroller of the Currency. The analyst adds that "NYB continues to cover the dividend on a cash basis, including a 1-year look-back, and we believe the latest earnings power can hold up even with the latest move in rates," and that the company "has plenty of capital and liquidity not to mention a solid credit performance cycle to date."