Go Where the Money Is. Here's 3 Top Bank Dividend Stocks to Buy

Regional bank stocks

Why do bank robbers rob banks? Because that's where the money is. There are numerous choices in the world of dividend investing. From dividend aristocrats to REITs, utilities, and consumer staples stocks, finding the right dividend stocks for your portfolio can be overwhelming. Bank stocks can be cyclical, but they also have profits and stable cash flow to keep the dividend payments flowing.

Long-term investors can find stability, consistency, and growth with bank stocks. While the more extensive money center bank stocks tend to have smaller dividends, it pays to dig a little deeper into the regional bank segment to find better dividends with more room for capital appreciation and income.

Regional banks can have more room for growth and the possibility of acquisition. Remember that falling prices equate to a higher dividend yield. It pays to wait for pullback support levels to test. Here are three bank dividend stocks with outsized dividends to watch for.

New York Community Bancorp Inc. (NYSE: NYCB)

This regional bank pays a hefty 7.18% annual dividend yield. They acquired Flagstar Bancorp on Dec. 1, 2022, to become one of the nation’s largest regional banks. NYCB is transitioning itself to a commercial banking model. The company continues to grow its loans and deposits. Its Q4 2022 earnings release incorporated the Flagstar acquisition as of Dec. 1, 2022, bulking up the figures. Total assets grew to $90.1 billion, up by $63 billion.

Total loans rose to $69 billion. Specialty finance loans rose 26% to $4.4 billion. Commercial real estate loans rose 52% to $10.5 billion, mainly from the Flagstar acquisition. Total deposits rose 27% in 202 to $58.7 billion, comprised of $16.1 billion from Flagstar and $7.6 billion of organic growth. Net interest margin (NIM) in Q4 2022 rose 18% YoY to $379 million; full-year 2022 NIM grew 8% to $1.4 billion.

NYCB CEO Thomas Cangemi commented, "In terms of our 2022 performance, this was another record year for the company. On a non-GAAP basis, we reported full-year diluted EPS of $1.23 and net income available to common stockholders of $603 million…  Last year's net income was a record level; in 2022, we broke that record. We are very pleased with our 2022 operating performance and see momentum building as we head into 2023.”

The MarketBeat MarketRank™ Forecast gives it 3.5 out of 5 stars with a 15.3% upside price target of $9.95 per share.

The Bank of N.T. Butterfield & Son Ltd. (NYSE: NTB)

This Bermuda-based offshore regional bank pays a 4.90% annual dividend yield. Fee-based income comprises 35% of its revenues, and securities are around 40% of its earning assets. Its loans have a heavy concentration of floating-rate debt. The bank has limited net interest income, mainly being a mortgage lender for the islands, including Bermuda, Cayman, and Channel Islands. They are also acquiring certain trust assets from Credit Suisse (NYSE: CS) in Guernsey, the Bahamas, and a branch in Singapore. Revenues rose 17% YoY, and NIM grew to $94.6 million Q4 2022, up from $74.5 million in the year-ago period. The banks gave the Cayman government a 15-year $150 million loan at 3.25% in Q4 2022. The efficiency ratio fell under 60%. The bank is exceptionally conservative with its investments. The Board authorized a share buyback program of up to 3 million shares. Removing pandemic-related travel restrictions and boosting experiential travel should also boost tourism and stimulate the local economies in its regions.

The MarketBeat MarketRank™ Forecast gives it 2.5 out of 5 stars with a 15.6% upside price target of $41.50 per share.


Canadian Imperial Bank of Commerce (NYSE: CM)

This is one of Canada's largest banks, paying a 5.48% annual dividend yield. Its Q1 2023 earnings results released on Feb. 24, 2023, beat EPS estimates by CC$.022, coming in at CC$1.72. Revenues climbed 7.8% YoY to CC$5.93 billion beating CC$5.72 analyst estimates. Rising interest rates and a lower provision for credit losses (PCL) helped bolster its bottom line. NIM rose to CC$ 3.21 billion in the quarter. Personal and Business banking net income rose 14% YoY to CC$589 million. CIBC CEO Victor Dodig commented, "In the first quarter, we delivered solid financial results as we continued to make steady progress in executing our client-focused strategy. In a fluid economic environment, our team is focused on living our purpose as we help make our clients' ambitions real.”

The MarketBeat MarketRank™ Forecast gives it 3 out of 5 stars with a 64.1% upside price target of $76.11 per share.

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