This Bank Stock Has the Highest Dividend Yield In Its Sector and Is Safe to Own

There are few banks that are able to pay a massive dividend while exposing shareholders to little risk. It's for this reason that New York Community Bancorp has long been coveted by income-seeking investors.

May 14, 2014 at 6:36PM

G

If you're looking for a high-yielding bank stock, it's hard to get much better than New York Community Bancorp (NYSE:NYCB). Not only does the New York-based lender sport a 6.6% yield, but it's also one of the safest bank stocks to own today.

What makes these two things possible?

First, New York Community Bancorp doesn't write bad loans, which is the absolute "most important thing" about great bank stocks. Even at the height of the financial crisis, it charged off only 0.53% of its loan portfolio. This was dramatically better than even industry darling US Bancorp, which had a net charge-off ratio of 2.49% in the first quarter of 2010. And there's simply no comparison to the likes of Bank of America (NYSE:BAC), which wrote off 4.7% of its loan book at its peak five years ago.

Second, New York Community Bancorp is phenomenally efficient. With an efficiency ratio in the low-40% range, it blows away competitors like Bank of America, which are struggling against bloated expense bases that may never be remedied -- click here to see how the nation's biggest banks stack up in this regard.

As Motley Fool senior banking specialist John Maxfield explains in the video below, the net result is that unlike Bank of America and others, New York Community Bancorp is able to pass on the lion's share of its revenue to shareholders via dividends.

Is New York Community Bancorp the best dividend option?
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers