Two Stress-Test Winners That May be Flying Under Your Radar: Fifth Third Bancorp (FITB), KeyCorp (KEY)

A high-yielding alternative

New York Community Bancorp, Inc. (NYSE:NYCB) is a $6 billion regional bank offer banking products and services in New York, New Jersey, Ohio, Florida, and Arizona. The company pays $1 per share in dividends annually. As a testament to the company’s solid financial position, the company did not have to cut its dividend during the depths of the 2008-2009 financial crisis. The dividend is nothing to sneeze at—at recent prices, the stock has a huge yield of more than 7%. New York Community Bank reported fiscal fourth-quarter and full-year adjusted earnings that both increased by a penny per share versus the prior year.

Bank on gains for the foreseeable future

Die-hard income investors may prefer New York Community Bancorp, which is well-run in its own right. The bank pays a dividend yield triple the yield on its two peers, and the dividend was maintained throughout the dire days of the financial crisis. The bank is modestly valued, exchanging hands for a trailing P/E of 12 and trades only slightly above book value.

For investors interested in a mix of dividends and strong growth potential, KeyCorp (NYSE:KEY) and Fifth Third Bancorp (NASDAQ:FITB) are ripe for the picking. These two excellently managed financial institutions have shown admirable performance digging out of the worst financial crisis our country has seen in decades. Credit trends continue to improve and these two banks’ Tier 1 ratios, even under dire circumstances, remain favorable.

The operating performance of these two banks speaks for itself. Both companies are reporting increasing profits, even under difficult conditions presented by the current low interest rate environment. Furthermore, both banks pay investors a dividend yield competitive with the broader market, and with the solid results from the stress test, are poised to continue providing compelling returns to investors in the future.

The article Two Stress-Test Winners That May be Flying Under Your Radar originally appeared on Fool.com and is written by Robert Ciura.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.