Oritani Financial Corp.

Oritani Financial Corp. (ORIT - Snapshot Report) 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) continues to benefit from a decline in home ownership rates in the United States. The apartment REIT delivered a 21% positive earnings surprise for the first quarter on higher occupancy rates and average monthly rents. It was Post's 11th consecutive positive earnings surprise. Management also raised its guidance higher for 2012, prompting analysts to revise their estimates significantly higher. It is a Zacks #2 Rank (Buy) stock. In addition to strong earnings growth potential, Post pays a dividend that yields 1.7%. Read the full article.

CoreSite Realty Corporation (COR) recently delivered strong first quarter results marked by an 18% increase in revenue and a 44% increase in funds from operation (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 raised its guidance for 2012, prompting analysts to revise their estimates higher. It is a Zacks #2 Rank (Buy) stock. The company 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.