3. Capitol Federal Financial
Shares of Capitol Federal Financial (CFFN) of Topeka, Kan., closed at $10.97 Monday. The shares were flat year-to-date, but were 24% higher than the consensus price target of $8.87 at the end of last year.
The company had $9.5 billion in total assets as of Sept. 30, with 35 traditional branches and 10 in-store branches, mainly in the Topeka, Wichita and Kansas City areas.The holding company completed its second-step conversion from a mutual thrift holding company to full stock ownership last December, raising a net $1.13 billion in common equity in the process. When Capitol Federal announced its financial results for its Fiscal 2011, ended Sept. 30, it also announced a special year-end dividend of 10 cents a share. Based on a regular quarterly payout of eight cents, the shares have a 2.73% dividend yield. Fiscal fourth-quarter net income was $16.8 million, or 10 cents a share, compared to $15.5 million, or an adjusted nine cents a share, a year earlier. Net interest income for the fiscal fourth quarter increased 7% from a year earlier to $43.9 million. The net interest margin was 1.89%, declining from 1.99% a year earlier. The ROA for the fiscal fourth quarter was 0.70%. Asset quality was strong, with nonperforming loans making up just 0.51% as of Sept. 30. The company reported a tangible equity to assets ratio of 15.1% as of Sept. 30. Five out of seven analysts covering Capital Federal Financial rate the shares a buy, while the remaining two analysts have neutral ratings. Capital Federal is sitting on a boatload of capital, with but has an expensive leverage strategy of borrowing from the Federal Home Loan Bank and holding a rather large securities portfolio. With the shares trading below book, the return of capital should provide support for the shares and a decent return for investors for the time being. As far as overall performance goes, with such a narrow margin and a shrinking loan book, any operating improvement will be icing on the cake.
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 Plus 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