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Three Regional Lenders With Dividends That Top JPM, USB and WFC

Stocks in this article: BACCPNCJPMUSBWFCNWBIORITUVSP

NEW YORK (TheStreet) -- Recent history has proved that money center lenders such as Bank of America (BAC) , Citigroup (C) and PNC Financial (PNC) can no longer be counted on as reliable income stocks.

During the Great Recession, all drastically slashed the dividend payment to shareholders. JPMorgan (JPM) , U.S. Bancorp (USB) and Wells Fargo (WFC) all reduced dividends, too, but by lesser amounts. Smaller regional lenders with bigger dividends, bigger profit margins and smaller amounts of debt such as Northwest Bancshares (NWBI) , Oritani Financial (ORIT) and Univest Corporation of Pennsylvania (UVSP) offer attractive alternatives for income investors looking in the financial sector.

To ensure that there is enough cash so that a dividend will be paid, investors should look for publicly traded companies that make a lot of money and owe very little.

Read More: 10 Stocks George Soros Is Buying in 2014

A high profit margin and a low debt-to-equity ratio contribute a great deal to maintaining the dividend amount paid to shareholders or increasing it. That is not Bank of America, with a profit margin of 13.10% and a debt-to-equity ratio of 2.23. Nor is it Citigroup, with a profit margin of 14.50% and a debt-to-equity ratio of 1.12.

But it is Univest, Oritani Financial and Northwest Bancshares.

Souderton, Pennsylvania, is home for Univest Financial, with its profit margin of 28.10% and a debt-to-equity ratio 0.00. The profit margin for Oritani Financial from Washington, New Jersey, is 40.20%, and the debt-to-equity ratio is 0.00. Based in Warren, Pennsylvania, Northwest Bancshares has a profit margin of 21.30% with a debt-to-equity ratio of 0.10. All top the industry average profit margin of 10.10% with a mean debt-to-equity ratio of 1.21 for money center banks.

Read More: Lending Club Is First of Many Disruptive Bank-Techs to Go Public

The dividend yield for each also far surpasses that of 2.72% for Wells Fargo, 2.69% for JPMorgan, 2.32% for U.S. Bancorp and 2.27% for PNC Financial.

At present, the average money center bank dividend yield is 2.39%. The dividend yield for Oritani Financial is 4.67%. There is a dividend yield of 4.19% for Univest Financial. Northwest Bancshares has a dividend yield of 4.12%.

There is certainly a role for money center banks in a portfolio.

After all, Warren Buffett is a major shareholder of Bank of America, U.S. Bancorp and Wells Fargo. But long-term investors should not overlook what regional lenders have to offer, too. For Northwest Bancshares, Oritani and Univest, it is a higher dividend yield with lower debt and a much better profit margin.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.


This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Now let's look at TheStreet Ratings' take on some of these stocks. TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 86.47%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.28% trails the industry average.
  • Despite the weak revenue results, BAC has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, BANK OF AMERICA CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • BANK OF AMERICA CORP's earnings per share declined by 40.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BANK OF AMERICA CORP increased its bottom line by earning $0.91 versus $0.25 in the prior year. For the next year, the market is expecting a contraction of 11.5% in earnings ($0.81 versus $0.91).

TheStreet Ratings team rates CITIGROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CITIGROUP INC (C) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 40.66% is the gross profit margin for CITIGROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, C's net profit margin of 0.78% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • CITIGROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CITIGROUP INC increased its bottom line by earning $4.25 versus $2.46 in the prior year. For the next year, the market is expecting a contraction of 16.5% in earnings ($3.55 versus $4.25).
  • Net operating cash flow has significantly decreased to $2,012.00 million or 89.95% when compared to the same quarter last year. Despite a decrease in cash flow CITIGROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -101.18%.

TheStreet Ratings team rates PNC FINANCIAL SVCS GROUP INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PNC FINANCIAL SVCS GROUP INC (PNC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for PNC FINANCIAL SVCS GROUP INC is currently very high, coming in at 92.59%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.98% is above that of the industry average.
  • Net operating cash flow has significantly increased by 98.71% to $1,550.00 million when compared to the same quarter last year. In addition, PNC FINANCIAL SVCS GROUP INC has also vastly surpassed the industry average cash flow growth rate of -101.18%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, PNC FINANCIAL SVCS GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 5.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

TheStreet Ratings team rates JPMORGAN CHASE & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate JPMORGAN CHASE & CO (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, expanding profit margins and attractive valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • Despite the weak revenue results, JPM has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 4.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 89.61%. Regardless of JPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JPM's net profit margin of 22.57% compares favorably to the industry average.
  • JPMORGAN CHASE & CO's earnings per share declined by 8.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, JPMORGAN CHASE & CO reported lower earnings of $4.32 versus $5.19 in the prior year. This year, the market expects an improvement in earnings ($5.51 versus $4.32).

TheStreet Ratings team rates U S BANCORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate U S BANCORP (USB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 15.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for U S BANCORP is currently very high, coming in at 87.58%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.22% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 0.7% when compared to the same quarter one year prior, going from $1,484.00 million to $1,495.00 million.
  • U S BANCORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, U S BANCORP increased its bottom line by earning $3.01 versus $2.84 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $3.01).
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

TheStreet Ratings team rates WELLS FARGO & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate WELLS FARGO & CO (WFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 3.8% when compared to the same quarter one year prior, going from $5,519.00 million to $5,726.00 million.
  • The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 94.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.94% is above that of the industry average.
  • WELLS FARGO & CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $3.89 versus $3.36 in the prior year. This year, the market expects an improvement in earnings ($4.12 versus $3.89).
  • Despite the weak revenue results, WFC has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

TheStreet Ratings team rates NORTHWEST BANCSHARES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NORTHWEST BANCSHARES INC (NWBI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for NORTHWEST BANCSHARES INC is currently very high, coming in at 75.93%. Regardless of NWBI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.60% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, NORTHWEST BANCSHARES INC's return on equity is below that of both the industry average and the S&P 500.
  • NORTHWEST BANCSHARES INC's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NORTHWEST BANCSHARES INC increased its bottom line by earning $0.73 versus $0.68 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($0.61 versus $0.73).

TheStreet Ratings team rates ORITANI FINANCIAL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ORITANI FINANCIAL CORP (ORIT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for ORITANI FINANCIAL CORP is currently very high, coming in at 75.85%. Regardless of ORIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ORIT's net profit margin of 30.07% significantly outperformed against the industry.
  • Despite the weak revenue results, ORIT has outperformed against the industry average of 12.8%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, ORITANI FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • ORITANI FINANCIAL CORP's earnings per share declined by 14.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ORITANI FINANCIAL CORP increased its bottom line by earning $0.95 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 8.4% in earnings ($0.87 versus $0.95).
  • In its most recent trading session, ORIT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

TheStreet Ratings team rates UNIVEST CORP OF PENNSYLVANIA as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNIVEST CORP OF PENNSYLVANIA (UVSP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UNIVEST CORP OF PENNSYLVANIA has improved earnings per share by 6.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNIVEST CORP OF PENNSYLVANIA increased its bottom line by earning $1.27 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.27).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 5.2% when compared to the same quarter one year prior, going from $4.83 million to $5.08 million.
  • The gross profit margin for UNIVEST CORP OF PENNSYLVANIA is currently very high, coming in at 92.72%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.57% is above that of the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, UNIVEST CORP OF PENNSYLVANIA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite the weak revenue results, UVSP has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Jonathan Yates is a financial writer who has written for numerous publications including Newsweek and The Washington Post.

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