This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
Estimates have been rising for Oritani Financial Corp. (ORIT - Snapshot Report) after the company delivered better than expected results for the second quarter of its fiscal 2012.
It is a Zacks #2 Rank (Buy).
Based on current consensus estimates, analysts project strong double-digit EPS growth for the company over the next couple of years. On top of this growth, it pays a dividend that yields a solid 3.7%. Valuation is attractive too with shares trading at just 1.1x book value.
Oritani operates 24 bank branches in New Jersey.
Second Quarter Results
Oritani reported results for the second quarter of its fiscal 2012 on January 30. Earnings per share came in at 18 cents, beating the Zacks Consensus Estimate by 4 cents. It was a 39% increase over the same quarter in 2010.
Net interest income increased 9% year-over-year, driven by a 14 basis point increase in the net interest margin. Unlike some banks, Oritani continues to make loans, focusing particularly on multifamily and commercial real estate. Net loans increased 9% to $1.823 billion.
The company recorded provisions for loan losses of $2.0 million, down from $2.5 million in the same quarter last year. Net charge offs to average loans outstanding declined significantly, from 1.34% to just 0.16%. Non-performing assets to total assets did increase, however, from 0.82% to 0.89%.
Following solid Q2 results, analysts raised their estimates for both 2012 and 2013, sending the stock to a Zacks #2 Rank (Buy).
The Zacks Consensus Estimate for 2012 is now $0.64, representing 19% growth over 2011 EPS. The 2013 consensus estimate is currently $0.74, corresponding with 16% EPS growth.
Analysts expect strong loan growth and solid profitability to continue over the next few years.
Returning Value to Shareholders
On top of double-digit EPS growth, the company pays a dividend that yields a solid 3.7%. Since the company began paying a dividend in 2009, it has raised it 3 times.
The company also continues to aggressively buyback its stock, which should also help drive EPS growth.
Valuation looks reasonable for ORIT with shares trading at a price to book ratio of just 1.1. That's above the industry median of 0.8, but the premium seems justified given the company's above-average ROE.
The Bottom Line
With rising estimates, strong growth potential, a solid 3.7% dividend yield and reasonable valuation, Oritani Financial still offers attractive total return potential.
Read the November 14 article here.
This Week's Growth & Income Zacks Rank Buy Stocks:
Arthur J. Gallagher & Co. (AJG) recently delivered better than expected fourth quarter results, driven by 26% revenue growth. Analysts have been raising their estimates off the strong beat, sending the stock to a Zacks #2 Rank (Buy). On top of strong earnings growth potential, the company pays a dividend that yields a solid 4.0%. Read the full article.
Honeywell (HON) recently delivered its 10th consecutive positive earnings surprise. Analysts have been raising their estimates off the strong quarter, sending its stock to a Zacks #2 Rank (Buy). On top of solid EPS growth, the company pays a dividend that yields 2.6%. Valuation is attractive too with shares sporting a PEG ratio of 0.9. Read the full article.
Applied Industrial Technologies (AIT) recently delivered its 8th consecutive positive earnings surprise driven by a strong increase in sales volume. Earnings estimates have been rising off the quarter, sending the stock to a Zacks #2 Rank (Buy). On top of strong EPS growth, the company offers a dividend that yields a solid 2.2%. Valuation looks attractive too with shares sporting a PEG ratio of 1.0. Read the full article.
Packaging Corporation of America (PKG) delivered better than expected results for its fourth quarter on January 23. Estimates have been rising off the strong quarter, sending the stock to a Zacks #2 Rank (Buy). In addition to double-digit EPS growth, the company offers a dividend that yields 2.8%. Read the full article.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Co-Editor of the Reitmeister Value Investor.