The company's second-quarter return on average assets was 1.36% and its return on average tangible equity was 17.40%, which are both solid returns in the current environment for banks.
KBW analyst Fred Cannon rates New York Community Bancorp a "Outperform," although he lowered his price target for the shares by two dollars to $13 last Thursday, while raising his 2012 earnings estimate to $1.14 from $1.03, and leaving his 2013 EPS estimate unchanged at $1.08.
Canon said that multifamily mortgage loan "prepayment income and mortgage banking should allow NYB to cover the dividend for the next two quarters at a minimum," and that "barring any M&A transaction that the company may enter then we believe the dividend is safe."
On the other hand, the analyst said that "there is near-term deal risk in shares of NYB and a higher discount rate and the lower price target is appropriate," adding that "while we do not believe a deal is imminent, we also believe that NYB could use its shares as currency for the right opportunity given the stock currently trades at 1.8x tangible book value which is above the 1.2x median multiple of peers."
Interested in more on New York Community Bancorp? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.