Thursday, June 6, 2013

"I stopped by the front steps of a vintage famous banker's home from the golden age of banking for inspiration to come up with a great bank stock for you. The spirits lead me to M & T Bank (Symbol MTB)"

Dow Jones Industrial Average 15115.57 (Down) Week ending 05-31-2013

(Photo by Hillary Glenn
In the grand days of banking, Anthony Drexel, Junius Morgan and J. Pierpont Morgan teamed up into an international colossus of a banking company, Drexel & Company and J.P. Morgan & Company. One man who started as a clerk at this firm, who was always the first one to arrive at work each day, and who eventually worked his way all the way up to Senior operating partner, was Edward T. Stotesbury. 

The portico columns to the left above were the front entrance to E.T. Stotesbury's multi-million dollar estate, Whitemarsh Hall, which was built from 1916 to 1921 , designed by famed architect Horace Trumbauer and was known as the "Versailles of America."

Whitemarsh Hall - Home of E.T. Stotesbury

At his peak of wealth in the 1920s, E.T. Stotesbury was worth over 100 Million dollars, first from banking and later in the traction and railroad transportation business. The 147 room estate is gone now, but there are relics of the old estate all over the 300-acre parcel in Springfield, Montgomery County in PA and, I dare say, a lingering "spirit of E.T." around the grounds. 

I am lucky enough to live within a mile of this grand display. I stopped by with family yesterday and stood at these steps and pictured the majestic estate in my mind. 

Will Rogers, Henry Ford, J.P. Morgan, General Douglas MacArthur and many U.S. Presidents and Crown Princes have all stood at the front door below these columns.

Jim Cramer, the famed financial guru from the CNBC business show Mad Money and the, grew up with his house basically in the front yard of this grand estate. At some point, I want to ask Jim if this estate was an inspiration for him and what spirited him to his voracious appetite for all things financial. 

My nephews, Edward Zwicker and Charles Zwicker, were certainly inspired by E.T. They wrote the Images of America Arcadia book,  Whitemarsh Hall - The Estate of Edward T. Stotesbury, (see link), which can really give you the full story of this palatial estate. 

The spirit of the conservative and frugal E.T., (his second wife Eva spent all the money), directed me to a bank chock full of earnings and a bank that has a nice dividend.

M & T Bank Corp. (Symbol MTB, $102.68)

M & T Bank pays a dividend yield of 2.73% annually. It has a Return on Equity of 11.27% and a PEG Ratio of 0.97, so pretty good numbers. 2013 earnings per share are looking like $8.20 per share and the 2014 numbers look like $8.77 per share. 

The 5 year earnings growth has been 10.14% annually. The 1 Year Total Return is 29.84% and the 3 Year Total Return has been 36.64% , so a good solid performer for your portfolio. The forward PE on the stock is 12.5

Operating Margins are 36.64% and Net Margins are 22.67%. The company has an Enterprise Value of $133.57 per share

In these turbulent markets, you need some mooring and consistency. MTB can provide this for you and your portfolio.

So keep your cool and hang in there...........    


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