STI Stock Report
2-Year Price History
Recent Price
(7/2 4:18PM)
-1.2%
$16.14
52-Week Price
$6.00 - $64.00
Market Capitalization
$5.8 Billion
Most Recent Dividend
$2.85
A Word Of Caution
SunTrust Banks, Incorporated (STI) has experienced a very significant loss in market value recently. Clearly this drop in price will have an impact on the valuation but the recent events that caused the drop may have not been fully factored into our analysis yet. When a stock loses value very quickly it could be a sign that there is a fear of bankruptcy.
Please take a look at the RazorWire feed on the right hand side of the page. If SunTrust Banks, Inc. has been mentioned on business television recently a portion of that story should be displayed. This should help bring you up to speed on any major issues they are facing right now.
Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect significant factors surrounding this company.
Therefore, (and as always), check additional sources and available information regarding STI before making an investment decision.
Ockham's Rating
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STI Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at STI through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.42x and 1.65x respectively.
Utilizing this range we can see that STI’s current Price to Sales per share ratio of 0.61x is significantly below its average levels historically. In fact, with a current price of $16.14, STI is a full 70% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for STI.
STI Cash Earnings
STI is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at STI, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time.
Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.
STI Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.
In STI’s case, the estimated annual dividend is $0.40 resulting in a current dividend yield of 2.48%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from STI against the historic high and low levels over the past 10 years. The highest dividend yield from STI over this period was 14.39% while the lowest dividend yield was 0.63% With that range in mind, STI’s current dividend yield is a full 66.98% below its median dividend yield historically. This is a negative from our perspective.
The latest TV Media Discussion
“…>>> welcome back. We have a market up 67 points. Take a look at some of the day's research calls, the upgrades and downgrades in moving the market SUNTRUST robinson humphrey upgrades appar krom booe & fitch. It goes to a buy from a neutral, raises the full-year estimates on expectations of better merchandise, lower inventory levels, smaller markdowns, and that may help profitability, but …” …more details…
“…Senator bunning or to other people, but I found that candor to be enjoyable, because we sit here and try to measure stocks every day and we know that maybe caterpillar was supposed to be having a good quarter and it we understood that SUNTRUST might be in turn-around mode, but maybe it isn't. How refreshing is it for geithner to just come out and give us a no-bs picture, saying, you know what? We don't know! …” …more details…
“…And met two of the requirements so far and the group not expected to repay it any time citigroup.^ gmac, key corp, regions financial, SUN TRUST banks and wells fargo, interestingly >> i'm surprised. …” …more details…
“…Banks that will be allowed to repay their t.A.R.P. And companies are eager to point out we've already raised money. SUNTRUST, what a coincidence makes a statement today, they raised what their government here's the banks lining up saying, here I am, we went to the private markets and got the now there's a list floating …” …more details…
“…Today's trading and keep an eye also a look at talbots selling for 75 million dollars to golden get capital. Shares of talbots moving lower this and SUNTRUST, take a look talked about banks raising cash, 2 billion dollars they say now and 96% of the way covering the gap from the stress test therement after selling 124 million shares into the open …” …more details…
“…If you're underinvested, play the secondaries. Love the bank secondaries. As long as you don't own them before it's announced, there's money you can make. We're more interested in the we were playing SUN TRUST earlier this week and made good >> brent, are you inclined to buy or sell stocks right now? >> we're in a strong intermediate uptrend. …” …more details…
“…Down the road in '09. >> and we will be talking to the "wall street journal" top-ranked financial analyst matt albrecht from s&p later on in the show about that very issue. But we should note there was a sector today. SUNTRUST getting an upgrade yesterday from cs, credit suisse, as well as today from morgan keegan saying essentially they raised a bunch of capital and that's all in the rearview mirror. So that's a positive here. Some of these regionals are doing quite well. …” …more details…
“…Program, the stock has been falling by a couple percent in the pre-market trading, but it's also risen 32% so far this year. And more news on the bank front. Bank front watching sti SUNTRUST shares this morning. Speeding up its capital raising plan, it was ordered by federal regulators according to the stress tests that it had to raise 2.2 billion dollars. Now, says it plans to sell 1.4 billion dollars in common stock and is raising 300 million dollars among other things to raise that capital and the ceo of SUNTRUST james wells today saying we're on a clear path to achieve our previously announced capital objectives and those objectives 2.2 billion dollars for SUNTRUST. That's the latest from the breaking news desk, alexis, back to you. Alexis: sandra, thanks so much. Let's go overseas before and get a check on the markets. Let's get the latest on an air …” …more details…
“…Just don't see the fact that demand will come back soon. >> and then dividends in financials of course have been will they come back? You do own, say, a capital one and a SUNTRUST, but anything >> well, for sure we see those opportunities for dividend growth within financials. Within the banks, probably not in the near term, but we fully expected that, and modeling for that at this point. We think it was the right thing …” …more details…
“…Talking about that and the top at the market offerings. There they are. Bank of america, the biggest by 13 1/2 billion. Fifth third, SUNTRUST, pnc is done, remember, $633 million. Completed its at the market but, you know, listen, the story here is a few weeks after the stress test, awful lot of …” …more details…
“…Shore oil drillers, rowan and noble to a buy from a hold because of a rise in drilling see shares trading to the upside now. SUN TRUST robinson humphrey upgrading women's clothing retailer from buy to hold because inventories have come in line with sales volume. Its balance sheet is strong compared to its competitors. …” …more details…
“…Many, many banks. 33% on ample average. Raising the price target. Bank of america, citi, bank of america, wells fargo. They did cut SUN TRUST and regions so you know, but the rest of the names got upgrades as far as the price the retailers, we have been getting a slew of retail numbers we've been watching. At same time, we are seeing …” …more details…
“…Them. Keycorp and northern trust and u.S. Bancorp and wells fargo, they did cut a couple of names and certainly are worth noting the ones that they cut. SUNTRUST and regents financial, those are the names that they lowered, but the rest of the group they gave, pretty much a 33% gain for price targets on average. Those are the ones that they cut so, that's what we're seeing. …” …more details…
“…When it didn't need to gets most favored nation status from the regulators. >> that matters. Because it means bb & t is in a position to buy all the failed banks in the south, to become the dominant southern banker. Eclipsing SUNTRUST, which remains a troubled bank. I think bb & t will follow in the footsteps of fleet bank in the late '90s and early '90s when it used the savings & loan crisis to become the largest …” …more details…
“…>> you like it? >> I think -- I like that trend. I like the idea that this could get financing business going on wall street for the banks. And frankly, I think the names that robert was mentioning, SUN TRUST, bb and t as potential acquirers provide a type of a back stop where they can take these banks over and be filling …” …more details…
“…Of billions, trillions of so 24 billion maybe not season as large. Some analysts say looking at potential takeover targets, he's looking specifically at SUN TRUST and bb and t. They're the bigger regional banks, but had pretty decent balance sheets and didn't get into a lot of givetives. …” …more details…
“…Performing in the sector. Ratings watch negative on nine regional banks outside there like bb & t, fits corp. And SUN TRUST. We saw a turn around. Also big mover today, general …” …more details…
“…This isn't a traditional underwriting. Specifically what happens is shorts have been laying out in front of a lot of these names like SUN TRUST that need capital but haven't announced raises. But we saw SUN TRUST come out with an at-the-money offering. We continue to hear about a lot of large investors calling the companies directly to try toed …” …more details…
“…Or they're under pressure I should say to revamp its board by bringing the directors with more banking experience. That's according to our colleagues at the wall street journal this morning. Also, SUNTRUST bank, this one is 1.25 billion dollars of common stock and to top it off, it's slashes its quarterly dividend from ten cents a share to a SUNTRUST BANKS though, it's gotten hit down recently, right now. It's posting about a 61/2% gain. Obviously, it's going to be that's what's in focus right now, but a lot of the traders …” …more details…
“…One penny a quarter. And we can raise about $300 billion via asset sale. So we're going to be doing that. Finally, from SUNTRUST, we get what we've seen citi do and what b of a is going to do, we expect, which is mainly pursue and exchange the preferred or hybrid securities for common it doesn't tell us that it is definitely going to do that. But SUNTRUST does say that that is yet another one of its considerations as it seeks to meet that $2.2 billion mark, essentially, that has been given it by the u.S. -- by the stress testers, if you will, in order to be in compliance. So there you have SUNTRUST. We'll see if -- we still haven't heard from fifth third or look at the stock performing well this morning. You know, there have been a lot of expectation during the course of the week that we would hear. …” …more details…
“…Let's get over to david fab we're the latest "the faber report." >> thanks, matt nesto. My apologyiesapologies, first off, my last report right before we went on air we heard from SUNTRUST and unfortunately we did not so I was telling you that SUNTRUST hadn't been heard from yet in terms of what its plans were to raise money in capital a week after learning it needed it in the stress test. We have that news. Having hit right around 9:00 a.M. This morning. SUNTRUST will sell up to 1.25 billion shares at another at the market offering. It adds its name to key corp. And pnc and bank of america, by …” …more details…
“…Very few rights as owners of public company, but one is to pick the board and elect those so, we've just seen that they have opened up a little higher and you're now seeing bank of america turn negative. Keep an eye on SUNTRUST BANKS. They were one of these ones that came through, you know, now that the stress tests are over, they've decided to go in the market and become the latest bank to go and have a secondary …” …more details…
“…Receive t.A.R.P. Funds. Lincoln, around the corner, lincoln is trading up. They're all looking up here. Hartford, 16 to 17, the close to $14.75. SUNTRUST, just prior to 9:00 eastern time announced they were going to make an offering for 1.25 billion shares in common remember, they need $2.2 billion under the stress test. …” …more details…
“…There's no rush, per se. But there is a larger question, which is with all that stock having already come to market during the course of this week, are you going to be able to raise money next week? Maybe so. On SUNTRUST I was hearing they might try and issue something during the coarse of this week. Not going to happen. Usually don't see companies do we'll see if we get something next week. As for those who did offer, of …” …more details…
“…Forget it, not down here, no way, not anymore. Not anymore. Now, we've got over a lot of banks that has raised money. What about the ones that haven't yet and need to? SUNTRUST, the fed said, hey, you regions, $2.5 billion percentagewise, regions was up there in terms of a capital rate. …” …more details…
“…Mark and erin, have a good >> see you next week? >>> up next, "the faber report." has david found the end of the equity offering rush? >> wow. Especially when SUNTRUST is I wonder. David has been following this one like a hawk. And then many chrysler dealers got let go yesterday. General motors is starting …” …more details…
“…Bank of americas and bb&t are pursuing market after openings. We get to hear whether SUNTRUST, regions and fifth third will attempt to hit up the equity time may be running out for citigroup couldn't do any equity …” …more details…
“…As for other capital raises that are coming, well, you can quite a few more. Certainly the banks deemed to need more capital under the t.A.R.P. -- excuse me, under the stress test. SUNTRUST comes to mind. There's a look at it. It is down 7%. Many of the banks are suffering some from having done offerings and others from the prospect they are going to. On this one I can tell you having spoken to a couple of bankers, the expectation is SUNTRUST will be coming to market with an offering during the course of this week. We'll see where they end up in terms of size. As for one that was done this morning, just want to end on this subject, on capital one. …” …more details…
“…But after that what we're going to do, we're going to find out that not all banks are going to some are going to make it, like fifth third, huntington bank financial, and SUNTRUST. But they're going to run out of I say all well and good. Got a big week in them next we salute them. We buy into the logic of owning huge mutual funds are …” …more details…
“…Preferred? >> gmac will need to buy these new convertible preferred on top of that. If you look at regions keycorp. And maybe SUNTRUST, all those companies will do it. I agree it's a ridiculous exercise. All you're doing is taking money from the left-hand pocket and putting it in the right-hand pocket. You haven't improved any …” …more details…
“…Two year losses 2.5 billion dollars in capital needed the government says and they've got only a 3.6 billion dollars market cap. Bringing up the rear, SUNTRUST 11.8 billion dollars estimated two year losses, 2.2 billion dollars in capital, the government says it needs. That company has 6.6 billion dollars market cap and finally the last two, we are going to …” …more details…
“…Other companies and banks in need of capital. Here is a look how they are faring of course, regions financial in need of 21/2 billion dollars. We've got other financials out SUNTRUST, keycorp, others, all trading to the upside. None of those companies out issuing common stocks just yet …” …more details…
“…One thing I think is we should have a much more countercyclical policy in terms of setting aside yet, if you look at what the s.E.C. Has done in the past with SUNTRUST bank back in 1998, they actually made SUNTRUST reduce the amount of reserve they put against bad loans. I just want two or three things they would throw in there as happening again. …” …more details…
“…They include pnc, which has to raise $600 million. That's the least amount of money all the way up to regions financial, which has to raise $2.5 billion. You also have keycorp and SUN TRUST having to raise money too. That's a quick look at the ten banks and what they have to do, and nine banks not needing to do anything other than to get …” …more details…
“…That was one of the places we had the most new news, what fifth third and key corp. And these other guys had to raise. >> and we'll get to that a lot >> SUN TRUST fell 257%. >> ben, quickly, if the number comes in around 500,000, 00,000, what's the market's reaction? >> I think we could see a test of yesterday's highs and to try and see if we could get …” …more details…
“…Motors 11. 5 billion, is citigroup 5.5 billion but it is also taking a lot of steps steps, regions financial $2.5 billion, SUNTRUST 2. Fifth 31 .1 and tm see coming in for a $600 million capital buffer …” …more details…
“…Has to raise capital from the regional banks. Keycorp was a name that everyone anticipated would have to raise capital as was regents, fifth third and SUNTRUST. So there ale really no surprise. The amount, I would say, they were in line, but slightly on the high side. >> will these banks be able to raise that amount of capital …” …more details…
“…Regional banks with the exposure to commercial real estate that's the next shoe to drop and how will they earn their way out when they'll be saddled with these responsibilities later on. >> they tucked about SUNTRUST adding up to 8.3% being this that's a significant number. The thing that's interesting to me is like capital one gets free and clear. There's an assumption here that …” …more details…
“…Nine banks do not need to, bbnt, state street, capital one and u.S. Bancorp. >> what does this mean, guys, for the regionals? You hear a number like 2.2 billion from SUNTRUST and it doesn't seem like a big number. >> it is. It's a huge number for these particular banks and much bigger than citi at 5 billion it's a chip shot at the rate they're raising money for for these guys, SUNTRUST and regents. That's a big, big dilutive that will be much more problematic than wells with raising 6 billion tonight or tomorrow, I wouldn't be surprised if they expand that a little bit and raised more than …” …more details…
“…Mary, can we get to you? >> sure. Melissa, steve was mentioning pnc needing to raise 600 million just to give you color on the others SUNTRUST needs to raise the problem spot for that bank would be second lien and junior fifth third has to raise 1.1 billion in additional capital. Real estate being the issue with that bank. …” …more details…