What the heck is New Century Financial Corp ? Why does it give juicy dividend yield of 15% ? Why does it have a P/E 6? April 3, 2006Posted by deminvest in Dogs of the Dow, investment, My investing mistakes, NEW New Century Financial Corp, Single stocks, stock I own, stocks, stocks that pay high dividends.
New Century Financial Rose To Over A 7-Month High Trading Markets – 23 Mar 2006
And also that:New Century Financial CEO got $1.07M bonus for 2005 MarketWatch – 22 Mar 2006
It seems all right. Then reading around I find that the mortgage business is being beaten down. Is it? Then why are dividend yield forecasts so juicy? Why are earning so high that they result into a P/E ratio of 6?
Then I go on http://finance.yahoo.com/q/ks?s=NEW where I do find nore great news:
- Qtrly Revenue Growth (yoy): 6.40% meaning in the last quarter Revenue grew 6.40% higher than the same quarter one year ago.
- Qtrly Earnings Growth (yoy): 48.20% Earnings grew 48%.
- And more great good news: Dividend for this year is 8.25 Dollars on each share that I can buy for 44$ today… and it will be paid in April! Making a dividend Yield of 17.90%… Next year’s forecast are for a dividend of 7 $ (yield 15.20%). Well I can accept that too!
Ok… Just a second… I changed my mind…. I will not buy 1000$ worth of NEW. I am getting 2000$ worth of NEW…
I bought 40 of them at $44,67 spending $1.786,80. Let the force be with me!
Well maybe someday I will tell you what was wrong with NEW, but right now I tell I feel like someone who made a big bargain!