6 responses to “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?”

1. 

   superg52

   April 5, 2006

   I bought some NEW stocks in the 2005,
   when the company confirmed the dividend for 2006,
   and I really made a big bargain!

   But you also made a good bargain:
   the company is still undervalued about 50%

   I think I will keep that shares until they’ll pay a good dividend
   and maybe I’ll buy some more

   Let the force be with us!

   Reply
2. 

   itemirus

   April 6, 2006

   I was about to buy some NEW shares last monday, but i thought that NRF (Northstar Realty Fund) is a much better REIT compared to NEW. She has more upside potential as a growth stock, and dividends on the rise as well.

   JMHO

   Reply
3. 

   deminvest

   April 6, 2006

   Thank you for your advice. I have studied NRF (Northstar Realty Fund), but in my honest opinion, it does’t match NEW. For several reasons:

   1) on http://finance.yahoo.com/q/ks?s=nrf you will find that NRF earnings are expected to go 25% down:

   Trailing P/E (ttm, intraday): 8.01
   Forward P/E (fye 31-Dec-07): 10.88

   The fact that P/E is expected to increase 25%, means that earnings are expected to go down 25%

   2) NEW is cheaper than NRF:
   Trailing P/E NRF (ttm, intraday): 8.01 Trailing P/E NEW (ttm, intraday): 6.50

   2) NEW offers much higher dividends and forecasteed dividends:

   NEW
   Trailing Annual Dividend Yield: 17.70%
   Forward Annual Dividend Yield: 15.30%

   NRF
   Trailing Annual Dividend Yield: 7.30%
   Forward Annual Dividend Yield: 10.10%

   3) NRF has an horribly high Payout Ratio of 143%, meaning that they are paying more dividends than they have earnings. No company can substain that and they will have to lower dividends.

   For all those reasons I will stick with NEW. Will you switch to NEW also. And if not, why do you prefer NRF?

   Reply
4. 

   mike

   April 20, 2006

   I bought New Century on 10/28/2006 for only $30.95 a share, it closed yesterday 4/19/2006 at $48.98. I’m going to hold on to it because the dividend is going to go up 5 cents a quarter for at least the rest of 2006.

   Reply
5. 

   deminvest

   April 20, 2006

   This stock continues to amaze me for how well it is performing and how cheap it is. I think I’ll only sell it if it triples its value.

   Reply
6. 

   deminvest

   February 13, 2007

   LOL after all this time I am reading about my last comment and find it really funny. NEW is now losing 60% of its value. The company is now posting losses…
   I think that this answers now to my questions about why it was so cheap one year ago…

   Reply