Real Banks With Real Dividends! (JPM, MTB, VLY, NYB, HCBK, PBCT, FNFG, AF, NWBI, CFR, UBSI, FMER, PRK, TRMK, HBHC, FNB, BOH, RY, BNS, BMO, CM)

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Most investors today believe that none of the banks are paying high-yielding dividends any longer.  While it is true that J.P. Morgan Chase & Co. (NYSE: JPM) is going to reinstate its dividend as soon as it is allowed to by regulators, its paltry 0.4% dividend yield just doesn’t entice income buyers today.  There is also a risk that regulators or politicians will opt to keep the heat on money-center banks to keep reserves aside or to make more loans to businesses rather than using cash to buyback stock or juice up the dividend.

We wanted to take a look at “all those other banks” out there that might have avoided the trouble that the big money center banks got into.  The screen pointed to M&T Bank Corp. (NYSE: MTB), Valley National Bancorp (NYSE: VLY), New York Community Bancorp Inc (NYSE: NYB), Hudson City Bancorp, Inc. (NASDAQ: HCBK), People’s United Financial Inc. (NASDAQ: PBCT), First Niagara Financial Group (NASDAQ: FNFG), Astoria Financial Corporation (NYSE: AF), Northwest Bancshares, Inc. (NASDAQ: NWBI), Cullen/Frost Bankers, Inc. (NYSE: CFR), United Bankshares Inc. (NASDAQ: UBSI), FirstMerit Corporation (NASDAQ: FMER), Park National Corp. (NYSE: PRK), Trustmark Corporation (NASDAQ: TRMK), Hancock Holding Co. (NASDAQ: HBHC), F.N.B. Corporation (NYSE: FNB) and Bank of Hawaii Corporation (NYSE: BOH).  In Canada there is Royal Bank of Canada (NYSE: RY), The Bank Of Nova Scotia (NYSE: BNS), Bank of Montreal (NYSE: BMO), and Canadian Imperial Bank of Commerce (NYSE: CM).It turns out that there are still many banks around the country that do pay higher dividends at above-market yields.

Our screen boiled down to a simple process.  We took a 3.0% Yield hurdle because that is what was implied as a future yield by JPMorgan this week if you use forward earning projections.  To avoid the micro-regional risks and to avoid the “so small no one cares if they fail” we also made a market cap hurdle of $1.0 billion.  After this we took a look at forward earnings expectations and also looked in the past to see what happened to their common stock dividends during the Great Recession when bank failure risks were systematic.

M&T Bank Corp. (NYSE: MTB) is based in Buffalo, NY and is the holding company for M&T Bank.  As of a year ago it had 793 banking offices in New York, Pennsylvania, Maryland, Delaware, New Jersey, Virginia, West Virginia, and the District of Columbia, as well as a branch in George Town, Cayman Islands. The company is in the process of acquiring another.

  • Share price of $89.85 compares to 52-week range of $72.03 to $96.15
  • Market Cap is $10.76 billion
  • Thomson Reuters sees 2011 at $6.12 EPS and $3.77 billion in revenues
  • Dividend of $0.70/quarter generates a yield of 3.2%
  • Dividend history during recession was unchanged

Valley National Bancorp (NYSE: VLY) is the bank holding company for Valley National Bank and it had 197 full-service banking branches a year ago located throughout New Jersey and New York.

  • Share price of $13.51 compares to 52-week range of $12.33 to $16.19
  • Market Cap is $2.2 billion
  • Thomson Reuters sees 2011 at $0.84 EPS and $550.98 million in revenues
  • Dividend of $0.18/quarter generates a yield of about 5.3%
  • Dividend history during recession was not effectively interrupted at all and it continued to pay a 5% stock dividend.

New York Community Bancorp Inc (NYSE: NYB) is the bank holding company for York Community Bank and New York Commercial Bank and as of a year ago it had 241 community bank branches and 35 commercial bank branches throughout New York.

  • Share price of $18.92 compares to 52-week range of $14.40 to $19.33
  • Market Cap is $8.24 billion
  • Thomson Reuters sees 2011 at $1.33 EPS and $1.25 billion in revenues
  • Dividend of $0.25/quarter generates a yield of 5.4%
  • Dividend history during recession was unchanged at $0.25 per quarter since 2004.

Hudson City Bancorp, Inc. (NASDAQ: HCBK) is the bank holding company for Hudson City Savings Bank and as of a year ago it had 95 branches located in 17 counties throughout the State of New Jersey.

  • Share price of $11.40 compares to 52-week range of $10.80 to $14.75
  • Market Cap is $5.6 billion
  • Thomson Reuters sees 2011 at $0.77 EPS and $966.6 million in revenues
  • Dividend of $0.15/quarter generates a yield of 5.3%
  • Dividend history during recession was actually raised during 2009 when others were eliminating or cutting the dividend.  The dividend has been this rate since mid-2009.