Be aware of the risks. That's my only advice. The dividend should be viewed as a risk. I perosnally use the phrase "I hope the dividend isn't cut. Be aware of hte key word....'hope'
We'll see if I am a share holder on Friday ... when options expire. I personally would not buy NYB right now. Broke some of my rules since I did naked puts....
I'd look elsewhere. BAC, WM, etc
Yes, we should believe management. The Board still likes management. Those of us who might not believe management should have sold and walked away by now or shorted NYB. My problem with management is that they made a bet the farm bet that had a low probability of paying off and had a low pay off (interest rates can�t go below 0%) if the bet did pay off. They lost half the farm but their W-2s for 2004 didn�t really change from 2003 the year before half the farm was lost. But the Board kept management so I defer to the Board and keep believing they won�t cut the dividend.
Fuzzy Wuzzy, you are starting to get it.
I wrote �if you two want an example, a good comparison outside the banking industry then look at what happens to utility stocks when they cut their dividends.�
You write �Utility stocks are bought mainly for the dividends, so they would go down when the dividend is reduced.�
I say you are right, you are starting to get it. Utilities and Savings Banks are often bought for their dividends, a CI is not. Utilities and Savings Banks have similar geographic spans, CI does not. Utilities and Savings Banks have significant operating assets of a long-term nature. Utilities and Savings Banks carry higher than industry average yields when there is the risk of a dividend cut. And if the dividend is cut the share price for both Utilities and Savings Banks go down some more at that time.
If there are not enough examples of what happens to Savings Banks' share prices when dividends are cut right in the banking segment for you and Kenny and you must look outside the industry look at an industry with similar investment characteristics � not CI.
You two, one a pumper, one a neophyte, are too much. But amusing.
Fuzzy Wazzy keep right on thinking that a nationwide leader in the health and welfare benefit industry and a single area urban savings bank are the same type of business when it comes to dividend theory.
I and others who have been doing this a long time have already said what will happen to the stock price here if the dividend is cut. But if you two want an example, a good comparison outside the banking industry then look at what happens to utility stocks when they cut their dividends.
Inside the banking industry other bank stocks have fallen further when they cut the dividend. Wake up Kenny many examples reside right there beside you in New England. Or perhaps you are too young to even know of all the NE banks that no longer exist that once paid dividends.
When the pros aren�t posting here I come for the entertainment you two provide. Can�t wait until Kenny starts regurgitating the pros and cons of using milk as a loss leader.
The 4month CD @ 3.75 will bring in hundreds of millions of dollars in new deposites in a few short weeks. I opened two of these accounts my self and the manager of the branch said they have been bringing in over a million dollars a week at that one branch alone. I do not doubt it since the branch was packed and people were lining up. The promotion is now over at the branch level but still available through the new online banking venture.
Do not under estimate NYB. While I was there the manager solicited me to open a business account with them, and they had all their ducks lined up. I in fact opened an account for my business, and if all goes well I will eventually close out my Citi accounts (with great pleasure). The fact is I got the service at NYB I felt I was entitled to and it looks like my fees could be cut in half when compared to Citi, less the Citi Bank attitude I have grown to hate!
I had the feeling they knew exactly what they were doing and have never seen them take such a professional and aggressive approach before. I have been doing business with them for over 25 years now and I have to tell you I was very impressed.
I agree with your answer about the dividend.
If it would ever be lowered it would cause the balance sheet to become stronger and it is more likely that the stock would rise.Case in point is CI when it was paying over 85 cents a share per year.The co. lowered it to 13 cents for the whole year.Guess what happened??
The stock went from $45.00-$46.50 a share a year ago and is now obver $107.00 a share.I have seen it happen many times over the years.
Good reasoning on your part.BRAVO!!!