Dividend Bank Stocks Worth Watching – April 2013

Opportunities to earn a decent yield on your money without too much risk are not very easy to find these days.  After all, U.S. Treasury and savings rates are still near historical lows. And, to find other options you’d need to do quite a bit of research or sign up with a professional. Either approach will cost you time and, individualized professional advice will dip into your earnings — maybe a bit more than you’d like.

So, if you’re an investor looking for income earning alternatives, you may want to look at the Weiss Ratings’ Portfolio of High Dividend Bank Stocks — a basket of higher-yield, well rated banking industry stocks, for some very attractive yields.  In fact, the average yield in this portfolio is much higher than the 1.99 percent average yield of the current S&P 500.

For some perspective, the historical average dividend yield of the S&P 500 since 1932 is 4.44 percent, about double what it is today.  And, looking at the chart below you can see that while the current S&P 500 yield is above 2 percent, it still falls short of the average yield of publicly traded banks.  Consequently, if you’re chasing yield, banks with high-paying dividends should certainly be part of your review. Take a look and see for yourself.   

 

Of the 1,145 publicly traded banks yielding an average of 2.30 percent, this Weiss portfolio targets those with above-average returns, good market liquidity and solid financial strength for investor consideration

There are 367 banks that have a dividend yield of at least 3 percent as of April 15, 2013, that’s 68 banks more than in the above-average yield range we identified in March 2013. And of those higher yield banks, 134 have at least $1 billion or more in assets, which gives them a bit more cushion for safety than many smaller institutions.

From the 134, we found 76 banks with average one-month daily volume greater than 25,000 shares, active enough to enable investors to trade in and out of the stock relatively easily. And, 31 had a Weiss Financial Strength Rating of B- (Good) or higher, as of Q4 2012 data.

New to the list this month are:  First Financial Bankshares, Inc. (FFIN) of Abilene, Texas; Pacific Continental Corp. (PCBK) of Eugene, Oregon; 1st Source Corp. (SRCE) of South Bend, Indiana; Washington Trust Bancorp., Inc. (WASH) of Westerly, Rhode Island; M&T Bank Corp. (MTB) of Buffalo, New York; Fifth Third Bancorp (FITB) of Cincinnati, Ohio; Independent Bank Corp. (INDB) of Rockland, Massachusetts; Lakeland Financial Corp. (LKFN) of Warsaw, Indiana; Sterling Financial Corp. (STSA) of Spokane, Washington and Washington Banking Company (WBCO) of Oak Harbor, Washington.  Falling off the list this month was First of Long Island Corp. (FLIC) of Glen Head, New York.  The primary reasons for the additions and subtractions are fluctuating stock prices, increasing or decreasing dividend yields, changes in the one-month trading volume and Weiss Financial Strength Rating upgrades or downgrades.

Weiss Ratings’ Portfolio of High Dividend Bank Stocks

Institution Name1 City State Ticker Dividend
Yield (%)
3/15/13		 Weiss Financial Strength Ratings2
First Financial Bancorp. Cincinnati OH FFBC 6.78%        B-
TrustCo Bank Corp NY Glenville NY TRST 4.70%        B
United Bankshares, Inc. Charleston WV UBSI 4.60%        B
City Holding Company Charleston WV CHCO 4.52%        B+
Washington Banking Company Oak Harbor WA WBCO 4.48%        B-
National Penn Bancshares, Inc. Boyertown PA NPBC 4.46%        B+
Oritani Financial Corp. Township of Washington NJ ORIT 4.30%        A-
Washington Trust Bancorp, Inc. Westerly RI WASH 4.27%        B
Sterling Bancorp New York NY STL 3.99%        B-
Southside Bancshares, Inc. Tyler TX SBSI 3.95%        B
Northwest Bancshares, Inc. Warren PA NWBI 3.92%        B
Community Bank System, Inc. De Witt NY CBU 3.90%        B
Trustmark Corporation Jackson MS TRMK 3.90%        B-
Bank of Hawaii Corporation Honolulu HI BOH 3.87%        B-
Wells Fargo & Company San Francisco CA WFC 3.65%        B-
Pacific Continental Corporation Eugene OR PCBK 3.55%        B
First Busey Corporation Champaign IL BUSE 3.54%        B-
BankUnited, Inc. Miami Lakes FL BKU 3.53%        A-
Simmons First National Corporation Pine Bluff AR SFNC 3.47%        B-
Rockville Financial, Inc. Vernon Rockville CT RCKB 3.46%        B
Cullen/Frost Bankers, Inc. San Antonio TX CFR 3.43%        B+
Westfield Financial, Inc. Westfield MA WFD 3.33%        B-
M&T Bank Corporation Buffalo NY MTB 3.32%        B-
Westamerica Bancorporation San Rafael CA WABC 3.22%        B
Independent Bank Corp. Rockland MA INDB 3.17%        B-
Sterling Financial Corporation Spokane WA STSA 3.16%        B-
Fifth Third Bancorp Cincinnati OH FITB 3.14%        B-
Lakeland Financial Corporation Warsaw IN LKFN 3.08%        B-
CVB Financial Corp. Ontario CA CVBF 3.04%        B+
First Financial Bankshares, Inc. Abilene TX FFIN 3.03%        B+
1st Source Corporation South Bend IN SRCE 3.02%        B

1 Name of publicly traded holding company which may be different from operating subsidiary.
2 Weiss Financial Strength Rating (based on 12/31/12 data) is for the operating subsidiaries
   of the holding company shown in Column 1.

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