National City Corp (NCC)

JDSancho (99.09) Submitted: 6/17/08 7:59 PM : Start Price: $5.31 NCC Score: 2.98

If you've read my other pitches, you'd know that I am making underperform calls based on looming dividend cuts at banks and regionals. A dividend cut usually results in a stock swoon, and thus, a higher score for me in CAPS. National City has already cut its dividend twice this year, so it doesn't fit my mold. But, I am still giving NCC a red thumb because of the fact that they had to cut twice this year. Good companies don't have to cut dividends. What does that say about companies that cut twice?

I think the dividend yield is now under 1%. Why even bother? They should have just eliminated the entire dividend to save face.

Bottom line: Underperform. Once all these regionals and over-leveraged banks cut their dividends, I will be more likely to accept the "We're at the bottom" bullish argument. Until then, the red thumb stays.

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