Top Performing Financial Dividend Payers with the Most Upside Potential (NCT, SCBT, TPGI)
Many of the top performing dividend payers in the financial sector over the past six months, such as Triangle Capital (NYSE: TCAP) and Redwood Trust (NYSE: RWT), have done just that, while others are at or near their mean price targets. It is not unusual for a stock on a tear to overrun its mean price target, which is the average value analysts expect the share price to reach.
But analysts believe that Newcastle Investment (NYSE: NCT), SCBT Financial (NASDAQ: SCBT) and Thomas Properties Group (NASDAQ: TPGI) still have some room to run, despite rising more than 25 percent in the past six months.
This New York City-based real estate investment and finance company has a market capitalization of about $1.4 billion and a dividend yield of more than 10 percent. The return on equity is a healthy 45.6 percent and the price-to-earnings (P/E) ratio is less than the industry average. But the long-term EPS growth forecast is less than nine percent. Short interest is more than one percent of the float. All six analysts surveyed by Thomson/First Call who follow the stock recommend buying shares. The mean price target is more than nine percent higher than the current share price, which pulled back less than two percent after reaching a 52-week high last week following a 10 percent dividend hike. Over the past six months, the stock has outperformed competitors Annaly Capital Management (NYSE: NLY) and Capital Trust (NYSE: CT).
SCBT provides retail and commercial banking services in North and South Carolina. The holding company has a market cap of more than $600 million and a dividend yield near 1.7 percent. Its P/E ratio is higher than the industry average, but so is its operating margin. EPS creamed analysts' estimates in the most recent quarter, and they are forecast to grow about 20 percent in the next five years. Five of eight analysts surveyed rate the stock at Buy or Strong Buy; none recommend selling shares. Their mean price target is almost seven percent higher than the current share price, as well as higher than the 52-week high. SCBT is up more than 39 percent year to date and trading near a multiyear high. It has outperformed the likes of Towne Bank (NASDAQ: TOWN) and National Bankshares (NASDAQ: NKSH) over the past six months.
Thomas Properties Group
This office and residential property management company is headquartered in Los Angeles and sports a market cap of less than $300 million and a dividend yield of about one percent. Note that the P/E ratio is much higher than the industry average. The company posted surprise net losses in the previous two quarters. The short interest is more than two percent of the float. Only two analysts were polled, one of which recommends buying shares. The sole price target is about 14 percent higher than the current share price. The stock reached a new 52-week high on Friday and is up about 80 percent year to date. Over the past six months, the stock has outperformed larger competitors Jones Lang LaSalle (NYSE: JLL) and CBRE Group (NYSE: CBG), as well as the broader markets.
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