This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

3 Liquid Bank Stocks With Highest Dividend Yields (Update 1)

Stocks in this article: PBCTNYBVLYFFBC

3. Peoples United Financial


Shares of Peoples United Financial (PBCT) of Bridgeport, Conn., closed at $11.94, down 2% year-to-date, after declining 4% last year.

Based on a quarterly payout of 16 cents, the shares have a dividend yield of 5.36%.

The shares trade for 1.4 times tangible book value, and for 15 times the consensus 2013 EPS estimate of 82 cents.

Peoples United had $28.6 billion in total assets as of Sept. 30. The company reported third-quarter net income of $62.2 million, or 18 cents a share, declining from $64.6 million, or 19 cents a share, in the second quarter, but increasing from $51.5 million, or 14 cents a share, in the third quarter of 2011. The sequential earnings decline reflected an increase in the provision for loan loss reserves to $15.1 million from $10.6 million, as the company made a special $5.7 million provision for losses on acquired loans, after acquiring 57 branches from Royal Bank of Scotland Group PLC (RBS) subsidiary RBS Citizens NA.

Peoples United saw its net interest income decline to $234.8 million in the third quarter, from $235.6 million the previous quarter, and $237.7 million a year earlier, as the net interest margin narrowed to 3.89% from 3.96% in the second quarter, and 4.07% in the third quarter of 2011.

Third-quarter noninterest income totaled $81.4 million, increasing from $75.7 million the previous quarter, but declining from $84.7 million a year earlier, when the company booked $8.6 million in securities gains. The sequential increase in noninterest income reflected increases in brokerage fees and in gains on the sale of residential mortgage loans.

Average loans grew by 1% sequentially and 4% year-over-year, to $20.7 billion in the third quarter.

The company's third-quarter operating ROA was 0.88%, declining from 0.93% the previous quarter, but increasing from 0.77% a year earlier. First United reported that the third-quarter return on average tangible equity was 8.3%, declining from 8.5% in the second quarter, but increasing from 6.1% in the third quarter of 2011.

Peoples United repurchased 13.5 million common shares for $164 million during the first three quarters, and had 4.5 million shares authorized for buybacks under its repurchase plan.

Sandler O'Neill analyst Mark Fitzgibbon rates Peoples United a "Hold," with a price target of $12.50, and said on Oct. 18 that third-quarter "operating results were generally in line with our expectations," and that "we have a difficult time seeing the company get to a double digit return on capital anytime soon."

Fitzgibbon also said that "as a result of the balance sheet growth, stock buybacks and dividends, the tangible common equity ratio fell from 11.5% to 11.2%, still a comparatively high ratio." The analyst also pointed out that the dividend on common shares "represents a core dividend payout ratio of 86%," and said that "while we recognize that PBCT is overcapitalized, we continue to think that there is a risk that at some point the regulators could push the company to lower the payout ratio."

It will be of great interest to investors to see if Peoples United's board of directors decides to curtail the buybacks in order to reduce the possibility of a dividend cut down the line.

PBCT Chart PBCT data by YCharts

Interested in more on Peoples United Bancorp? See TheStreet Ratings' report card for this stock.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,817.90 +7.84 0.04%
S&P 500 2,069.41 +5.91 0.29%
NASDAQ 4,754.8920 +41.9220 0.89%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs