Thursday, January 23, 2020

Healthy Credit, A Good Dividend, And A Repeatable M&A Model Supporting People's United Financial

People’s United Financial (PBCT) isn’t going to win any sprints, but I don’t think that’s why most of its shareholders own the stock. People’s United is a high-quality bank that doesn’t take a lot of chances on lending, but instead chooses to leverage a solid core deposit base in the Northeast U.S. while steadily executing on a roll-up community bank M&A strategy and paying a healthy dividend. I can, and will, quibble about unimpressive long-term tangible book value growth, but steady dividend growth over time is not a bad thing.

The shares haven’t really gone anywhere from when I last wrote about the stock, underperforming the sector, and I’m not all that surprised. People’s United has some counter-cyclical defensive characteristics, but I thought those were already reflected in the share price, and I continue to believe that is the case today.

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Healthy Credit, A Good Dividend, And A Repeatable M&A Model Supporting People's United Financial

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