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N.Y. Community Bancorp is a Feast or Famine

A Negative Take on the Stock

Citigroup analyst Josh Levin on Thursday cheerfully reiterated his "sell" rating for New York Community Bancorp, with a price target of $11, saying in a note to clients that "in the words of Mr. T, we predict pain."

"Our thesis remains that NYCB's dividend is not sustainable given the company's high payout ratio, weakening earnings profile, growing leverage and heightened regulatory scrutiny," Levin wrote, adding that "while NYCB may continue to look for ways to harvest non-recurring items to boost EPS, we view such activity as a bearish because it suggests that NYCB is running out of earnings levers to pull."

Levin estimates New York Community's earnings for all of 2013 will come in at 95 cents a share, meaning the company will dip into capital to cover the dividend. His 2014 EPS estimate is just 94 cents.

A Neutral View, With a "Safe Dividend"

BMO Capital Markets analyst Peter Winter has a neutral rating on New York Community Bancorp, and said in a report on Thursday that "we believe the dividend is safe given the strong capital ratios and solid credit trends."

New York Community reported a March 31 tangible equity ratio of 7.61%, compared to 7.65% the previous quarter and 7.64% a year earlier.

Winter's target price for New York Community is $13, and he estimates the company will earn $1.04 a share this year, with EPS declining slightly in 2014, to $1.02.

NYCB ChartNYCB data by YCharts

Interested in more on New York Community Bancorp? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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