Oritani Financial Corp.
(
ORIT
) continues to deliver strong results. The bank, which operates 24
branches in New Jersey, recently delivered its 3rd consecutive
positive earnings surprise due to strong loan growth, expanding
margins, and solid asset quality.
This has prompted analysts to raise their estimates for both 2012
and 2013, sending the stock to a Zacks #2 Rank (Buy).
In addition, the company recently announced a 20% hike in its
quarterly dividend. It currently yields an attractive 4.2%.
First Quarter Results
Oritani delivered strong results for its fiscal third quarter on
April 24. Earnings per share came in at 20 cents, beating the Zacks
Consensus Estimate by 3 cents. It was a whopping 54% increase over
the same quarter last year.
Net interest income rose 8% year-over-year as the net interest
margin expanded 21 basis points to 3.58%. Interest on mortgage
loans increased 7% while the balance on average loans outstanding
rose 12%, as the Company continues to emphasize loan originations,
particularly multifamily and commercial real estate loans.
The allowance for loan losses increased 10 basis points to 1.55% of
total loans as the percentage of non-accrual loans rose 21 basis
points to 0.96%. Net charge-offs were just 0.02% of average loans,
however.
Estimates Rising
Earnings estimates for both 2012 and 2013 have been rising
following strong Q3 results. As you can see in the Price &
Consensus chart below, estimates have steadily risen over the last
several months as Oritani has delivered three consecutive positive
earnings surprises:
It is a Zacks #2 Rank (Buy).
The Zacks Consensus Estimate for 2012 is now $0.73, representing
35% growth over 2011 EPS. The 2013 consensus estimate is 13% higher
than the 2012 estimate at $0.82.
Dividend Rising
Oritani also announced a 20% increase in its quarterly dividend,
marking its second hike in three quarters.
It currently yields a juicy 4.2%.
Reasonable Valuation
The valuation picture looks reasonable for Oritani with shares
trading at just 1.3x book value, a discount to the industry median
of 1.5x.
Its forward P/E ratio of 18x is above the industry median 14x, but
this seems justified given the company's above-average growth
rates.
The Bottom Line
With strong earnings momentum, a solid 4.2% yield and reasonable
valuation, this quality bank stock offers investors a lot to like.
Read the November 11 article here.
This Week's Growth & Income Zacks Rank Buy
Stocks:
Post Properties, Inc.
(
PPS
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the United States. The apartment REIT delivered a 21% positive
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earnings surprise. Management also raised its guidance higher for
2012, prompting analysts to revise their estimates significantly
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earnings growth potential, Post pays a dividend that yields 1.7%.
Read the full article.
CoreSite Realty Corporation
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(FFO). And management raised its guidance for the remainder of the
year, prompting analysts to also revise their estimates higher.
This sent the stock to a Zacks #2 Rank (Buy). Along with rising
estimates and strong growth projections, CoreSite pays a dividend
that yields a solid 2.8%.
Read the full article.
Canadian National Railway Company
(
CNI
) delivered better-than-expected first quarter results on strong
freight volumes, driven by an improving North American economy. And
management revised their earnings guidance higher for the remainder
of 2012. This prompted analysts to raise their estimates for both
2012 and 2013, sending the stock to a Zacks #2 Rank (Buy). The
company also continues to steadily raise its dividend. It currently
yields a solid 1.8%.
Read the full article.
Simon Property Group, Inc.
(
SPG
) continues to deliver better-than-expected results on solid rent
growth and improving occupancy rates. And management recently
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also raised its quarterly dividend for the third straight quarter.
It currently yields 2.6%.
Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for
Zacks Investment
Research
and Editor of the
Income Plus Investor service
.
ORITANI FINL CP (ORIT): Free Stock Analysis
Report
ORITANI FINL CP (ORIT): Free Stock Analysis
Report
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