Shares of New York Community Bancorp Inc. (NYCB) hit a new 52-week high, touching $16.51 at the close of trading session on Nov 13. This reflects a solid year-to-date return of 31.9%. The trading volume for the session was 1.7 million shares.
Despite the strong price appreciation, this Zacks Rank #3 (Hold) financial service provider has scopes of improvement, given its positive estimate revisions over the last 30 days and expected year-over-year earnings growth of 2.43% for 2013.
New York Community Bancorp’s impressive price performance reflects better-than-expected third-quarter 2013 results – including a positive earnings surprise of 3.85% – and prudent expense management.
On Oct 23, New York Community Bancorp declared third-quarter operating earnings of 28 cents per share, which beat the Zacks Consensus Estimate by 2 cents. Lower operating expense and steady improvement in credit quality were the tailwinds for the quarter.
New York Community Bancorp’s non-interest expense totaled $146.2 million, down 1.5% from the prior-year quarter. Further, nonperforming non-covered loans were 0.43% of total non-covered loans as of Sep 30, 2013, down from 0.60% as of Jun 30, 2013. Provision for loan losses on non-covered loans was $5.0 million in the reported quarter, down year over year from $10.0 million.
New York Community Bancorp’s regular dividend payouts reflect its strong liquidity position. The stock, therefore, appears to be a good pick for yield-seeking investors. However, decline in the top line due to a still low interest rate scenario, sluggish economy recovery and a stringent regulatory environment is the primary concern.
Estimate Revisions Show Potency
In the last 30 days, the Zacks Consensus Estimate for 2013 increased 0.9% to $1.07 per share. For 2014, the Zacks Consensus Estimate went up 2.0% to $1.04 per share over the same time frame.
Better performing financial organizations include Investors Bancorp Inc. (ISBC), Meridian Interstate Bancorp, Inc. (EBSB) and Mutualfirst Financial Inc. (MFSF). All these stocks carry a Zacks Rank #1 (Strong Buy).