Investment analysis of the common stocks of selected California banks. - Page 155 |
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142
1 9 5 7 • T his i s based on th e p a s t d iv id e n d p o lic y o f th e
bank, and t h i s p o l i c y i s ex p e cted t o continue* I f th e
p o l i c y o f r e t a i n i n g a h ig h p r o p o r tio n o f e a rn in g s cont
i n u e s , th e s a f e t y o f th e bank i s e x p e c te d t o im prove,
th u s making a h ig h e r q u a l i t y in v estm ent* T h e re fo re , due
t o th e p r o s p e c tiv e p r o t e c t i o n o f d e p o s i t o r s ’ funds and
f u t u r e r i s k a s s e t s , a b e t t e r th a n average m u l t i p l i e r i s
e x p e c te d of th e s u p e r io r investm ent* The h ig h m u l t i p l i e r
f o r C itiz e n s N a tio n a l i s a ls o e s tim a te d a t 1 5 * 0 . The ;
average y e a r l y low p r i c e - e a r n in g s r a t i o f o r C itiz e n s
N a tio n a l i s on ly $ . 1 * However, C itiz e n s N a tio n a l i s |
i
j e x p e cte d t o be o f h ig h e r q u a l i t y and perform ance i n th e i i I
| f u t u r e a lth o u g h not a s h ig h a s th e average m u l t i p l i e r . j
! i I Ten tim e s e a rn in g s i s a low enough m u l t i p l i e r , and any |
! i
I m u l t i p l i e r l e s s th a n t h i s amount does n o t a d e q u a te ly
j m easure th e q u a l i t y o f th e in v e s tm e n t. Thus C itiz e n s i
j N a tio n a l has a m u l t i p l i e r range o f 15*0 and 1 0 * 0 .
i
S e c u r i t y - F i r s t N a tio n a l was g iv e n a hig h i n v e s t -
| ment m u l t i p l i e r o f 14*0 because i t shows b e t t e r th a n
I average i n s a f e t y and p e rfo rm a n c e .
I i
; The a n t i c i p a t e d 1963 e a r n i n g s f o r S e c u r i t y - F i r s t ,
i I
as w e ll a s f o r th e o th e r s e l e c t e d C a l i f o r n i a b an k s, were
! 1
! e s tim a te d from th e r e l a t i o n s h i p t h e i r d e p o s i t s were to i »
I an in d ex o f b u s in e s s a c t i v i t y i n S outhern C a l i f o r n i a . In (
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| Title | Investment analysis of the common stocks of selected California banks. - Page 155 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 142 1 9 5 7 • T his i s based on th e p a s t d iv id e n d p o lic y o f th e bank, and t h i s p o l i c y i s ex p e cted t o continue* I f th e p o l i c y o f r e t a i n i n g a h ig h p r o p o r tio n o f e a rn in g s cont i n u e s , th e s a f e t y o f th e bank i s e x p e c te d t o im prove, th u s making a h ig h e r q u a l i t y in v estm ent* T h e re fo re , due t o th e p r o s p e c tiv e p r o t e c t i o n o f d e p o s i t o r s ’ funds and f u t u r e r i s k a s s e t s , a b e t t e r th a n average m u l t i p l i e r i s e x p e c te d of th e s u p e r io r investm ent* The h ig h m u l t i p l i e r f o r C itiz e n s N a tio n a l i s a ls o e s tim a te d a t 1 5 * 0 . The ; average y e a r l y low p r i c e - e a r n in g s r a t i o f o r C itiz e n s N a tio n a l i s on ly $ . 1 * However, C itiz e n s N a tio n a l i s | i j e x p e cte d t o be o f h ig h e r q u a l i t y and perform ance i n th e i i I | f u t u r e a lth o u g h not a s h ig h a s th e average m u l t i p l i e r . j ! i I Ten tim e s e a rn in g s i s a low enough m u l t i p l i e r , and any | ! i I m u l t i p l i e r l e s s th a n t h i s amount does n o t a d e q u a te ly j m easure th e q u a l i t y o f th e in v e s tm e n t. Thus C itiz e n s i j N a tio n a l has a m u l t i p l i e r range o f 15*0 and 1 0 * 0 . i S e c u r i t y - F i r s t N a tio n a l was g iv e n a hig h i n v e s t - | ment m u l t i p l i e r o f 14*0 because i t shows b e t t e r th a n I average i n s a f e t y and p e rfo rm a n c e . I i ; The a n t i c i p a t e d 1963 e a r n i n g s f o r S e c u r i t y - F i r s t , i I as w e ll a s f o r th e o th e r s e l e c t e d C a l i f o r n i a b an k s, were ! 1 ! e s tim a te d from th e r e l a t i o n s h i p t h e i r d e p o s i t s were to i » I an in d ex o f b u s in e s s a c t i v i t y i n S outhern C a l i f o r n i a . In ( |
