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

5 Bank Stocks That Need a Higher Dividend (Update 1)

4. East West Bancorp

East West Bancorp (EWBC - Get Report) of Pasadena, Calif., closed at $21.99 Friday, returning 11% year-to-date. The company announced on Jan. 20 that it would double its quarterly dividend during the first quarter, to 10 cents a share. Based on the new payout, the forward dividend yield on the shares is 1.82%.

The company also announced a new stock repurchase authorization, to buy back up to $200 million worth of common shares.

East West Bancorp reported fourth-quarter earnings available to common shareholders of $64.5 million, or 43 cents a share, increasing from $60.7 million, or 41 cents a share in the third quarter, and $32.2 million, or 22 cents a share, in the fourth quarter of 2010.

The year-over-year earnings increase reflects a decline in the quarterly provision for loan losses to $20 million from $29.8 million, and the prior year period's net decrease in Federal Deposit Insurance Corp. indemnification assets of 36 million, related to earlier failed-bank acquisitions. The indemnification assets declined by $20.4 million during the fourth quarter of 2012.

The net interest margin was a strong 4.13% in the fourth quarter, increasing from 3.98% the previous quarter, but following a trend for most regional banks in the prolonged low-rate, declining from 4.43% a year earlier.

Total loans increased 2% during the fourth quarter to $14.5 billion as of De. 31, with commercial and trade financing loans growing 4% to $3.1 billion, and single family mortgage loans growing 18%, to $1.8 billion.

Average noninterest-bearing deposits grew 7% during the fourth quarter and 30% year-over-year, to $3.5 billion, as of Dec. 31.

East West Bancorp's ROA has ranged between 1.07% and 1.21%, over the past five quarters.

Sterne Agee analyst Brett Rabatin on Jan. 23 reiterated his "Buy" rating for East West Bancorp and raised his price target by two dollars to $25, counting on "outperformance for the shares is likely as a higher valuation ensues from less consternation about the [net interest margin] as run-off of covered assets occurs." The higher price target is based on a multiple of 12.5 times the analyst's 2013 EPS estimate of $2.2.

The shares trade for 1.8 times tangible book value and for 12 times the consensus 2012 EPS estimate of $1.79.

Interested in more on East West Bancorp? See TheStreet Ratings' report card for this stock.
3 of 6

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
BAC $14.36 -2.78%
EWBC $36.82 -2.75%
FITB $18.03 -2.28%
JPM $62.56 -1.93%
RF $9.24 -2.22%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs