Barclays on U.S. Consumer Finance: Dividend Growth Should Be a Catalyst in 2011
Tweet
Share
E-mailGet Alerts WBS Hot Sheet
Price: $45.13 -0.9%
Rating Summary:
16 Buy, 9 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 7
Rating Summary:
16 Buy, 9 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 7
Join SI Premium – FREE
Barclays on U.S. Consumer Finance: Dividend Growth Should Be a Catalyst in 2011
Barclays analyst says, "Our coverage universe is all over the spectrum in terms of dividend yields. There are the 1) the mortgage REITS which are paying mid to high-teens yields now, 2) the well-capitalized small-midcap (smid-cap) banks/thrifts which have maintained what could be viewed as "normalized payout ratios" and yields in the low to mid single digits like PBCT and FNFG, 3) the credit card companies and banks/thrifts that cut their dividends during the recession but are positioned to increase them in 2011 (the focus of this report), and 4) the handful of companies that do not appear likely to pay a dividend in the near term."
"We forecast the largest dividend increases for Webster (NYSE: WBS), Discover (NYSE: DFS), Capital One (NYSE: COF), Susquehanna (Nasdaq: SUSQ) and Fulton (Nasdaq: FULT), while Hudson City (Nasdaq: HCBK) is the lone outlier with a projected dividend reduction in 2011. For the card stocks, we expect AXP and DFS to return to levels close to their historical payouts in 2011. For the smid-cap banks, we expect FULT, WBS and SUSQ to raise their dividend in 2011, though they might not return to their historic payout ratios of 50%+ due to management and regulatory conservatism. People's United (Nasdaq: PBCT) continues to "grow into" its dividend through acquisitions and organic growth. We expect First Niagara (Nasdaq: FNFG) to maintain a payout ratio similar to current levels, but increase its dividend as earnings grow. For the thrifts, we do not project any changes from 4Q10 annualized dividend levels, except for HCBK which has alluded to a dividend reduction due to declining earnings and potential regulatory pressure."
Barclays analyst says, "Our coverage universe is all over the spectrum in terms of dividend yields. There are the 1) the mortgage REITS which are paying mid to high-teens yields now, 2) the well-capitalized small-midcap (smid-cap) banks/thrifts which have maintained what could be viewed as "normalized payout ratios" and yields in the low to mid single digits like PBCT and FNFG, 3) the credit card companies and banks/thrifts that cut their dividends during the recession but are positioned to increase them in 2011 (the focus of this report), and 4) the handful of companies that do not appear likely to pay a dividend in the near term."
"We forecast the largest dividend increases for Webster (NYSE: WBS), Discover (NYSE: DFS), Capital One (NYSE: COF), Susquehanna (Nasdaq: SUSQ) and Fulton (Nasdaq: FULT), while Hudson City (Nasdaq: HCBK) is the lone outlier with a projected dividend reduction in 2011. For the card stocks, we expect AXP and DFS to return to levels close to their historical payouts in 2011. For the smid-cap banks, we expect FULT, WBS and SUSQ to raise their dividend in 2011, though they might not return to their historic payout ratios of 50%+ due to management and regulatory conservatism. People's United (Nasdaq: PBCT) continues to "grow into" its dividend through acquisitions and organic growth. We expect First Niagara (Nasdaq: FNFG) to maintain a payout ratio similar to current levels, but increase its dividend as earnings grow. For the thrifts, we do not project any changes from 4Q10 annualized dividend levels, except for HCBK which has alluded to a dividend reduction due to declining earnings and potential regulatory pressure."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Moncler SpA (MONC:IM) (MONRY) PT Raised to EUR69 at RBC Capital
- Opthea Ltd. (OPT) PT Raised to $18 at Oppenheimer
- Morphic Holding, Inc. (MORF) Tops Q1 EPS by 6c
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Barclays, Susquehanna International Group of Companies, Dividend, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
