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Friday, 11/07/2003

ZION - No. Not the Last Human City!
By Nich Sheldon
ZION - Zions Bancorporation

Company Description

Zions Bancorporation is one of the nation's premier financial services companies, consisting of a collection of great banks in select high growth markets. Under local management teams and community identities, Zions operates over 400 full-service banking offices in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Utah and Washington. In addition, Zions is a national leader in SBA lending, public finance advisory services, agricultural finance and electronic bond trading. The Company is included in the S&P 500 Index. Investor information and links to subsidiary banks can be accessed at

[Source: Company Press Release]

Reasons to Invest:

The Matrix Revolutions just came out into theatres this past Wednesday. The movie made theatrical history, in that it opened at the exact same time - depending on where you live - across the world. While this is by no means a movie review web site, I have to say that I was rather disappointed with the movie. Don't get me wrong, if you have seen Matrix one and two you should definitely go see this one, only don't expect all of your questions to be answered. This movie was basically the fight between man and machine. Every human that was fortunate enough to be unplugged from the Matrix, did what ever they could to defend Zion - the last human city.

While this has no significance to Drip Investing whatsoever, I thought it might be an interesting beginning for this week's Drip of the Week, which is ZION. No silly, not Zion the last human city, but Zions Bancorporation traded on the NASDAQ - ZION (Big Grin).

Zions Bancorporation hit a new 52-week high today, nearly breaching the 64 level. A closer look at ZION's chart and it is easy to see that the company has been on the up and out since October 7th, 2002, when it sank as low as 34.14. Thirteen months later and Zion is nearly thirty points higher. Now I know you Drip Investors are drooling, contemplating what your portfolio could look like today if you yourself had picked ZION last October (2002). In my normal weekly crusade to find Drip candidates for my own portfolio, I come across many stocks where I find myself doing the same exact thing. I am always eager to say, 'what if I had added this stock to my portfolio then! Man I could be wealthy. I could have been rich.' However, I do find it humorous that I never seem to ask myself 'what if I picked that stock that fell thirty points over the last year. I could be broke, or poor.' I guess we could call that the human desire to persevere or better ourselves by any means possibly.

News Briefing

Anyhow, lets get on to the figures shall we? While news on the stocks we spotlight has little effect on our long-term investments, I thought I would I would take a little time to tell you what news is surrounding Zions Bancorporation's stock. This Utah based bank, was recognized as Utah's top revenue growth company by the MountainWest Venture Group for the fourth consecutive year. MountainWest Venture Group has been giving out this award for nine years at the annual "Utah 100" luncheon held in Salt Lake City, Utah. ZION was said to have received this award based upon their revenue growth from 1998 to 2002.

Along with being awarded by the MountainWest Venture Group, ZION's CEO, Harris H. Simmons joined President George W. Bush at the White House to sign the "Check 21" Act together. This Act gives electronic versions of checks the same legal validity as the original paper checks.

A press release from Zions Bancorporation noted that, this Check 21 bill is intended to reduce the check payment system's dependence on physical transportation networks, and streamline the collection and return process. Also mentioned in the press release was that ZION's has been at the forefront on this industry-changing issue.

A Look at the Figures

There isn't any wonder why ZION was noted as Utah's top revenue growth company when you take their earnings into consideration. On November 4th, 2003 ZION reported their third quarter earnings and the numbers are impressive to say the least. Q3 net income was reported to be $62.1 million, or $0.68 per diluted share. When compared to last years third quarter net income of 39.4 million, or $0.43 earnings per share diluted it is easy to calculate that this years net income was 57.4% higher, and earnings were 58.1% higher. An increase like this further helps justify the reason why ZION is this week's Drip of the Week.

Dividend Information

ZION's current dividend yield percentage is at 1.94%, which in my opinion is a pretty attractive yield for a banking company. Their quarterly dividend is $0.30 per share, which calculates out to an annual dividend of $1.20. The next quarter's dividend date is set for November 26th, 2003.

ZION's expected dividend percentage over the next three years is predicted to be at 3.57 percent. This is a little less optimistic when you consider their 5-year dividend percentage is estimated to be 11.22 percent.

Performance History

In regards to price performance ZION is ranked 65th out of 99 in its industry over the past four weeks. This is 8 ranks higher than their 13-week period and 21 ranks higher than their past 26- week ranking. From this I gather that ZION is moving through the ranks steadily, and over the next 12 weeks, I suspect it could be ranked in the top 25 percent of it's industry. Currently, ZION is ranked 73rd when compared to it's industry. Remember, the higher the ranking the better, as 99th is figuratively the best ranking possible.

The company has an impressive pricing history, especially in essence of their 52-week changes. Their 52-week change is 56.41% and in relation to the S&P 500 their price change is 33.44%.

My technical analysis tells me that there is strong overhead resistance at the 64 level, as the last time ZION reached 64 was January 4th, 2001. The reason I like ZION is because news is a big part of what the stock is going to do over the short-term. Since all of the news surrounding ZION is positive right now, I am hoping that this will help ZION break through long-term resistance of 64. I think that if the 64 level is broken, ZION could take a run for higher ground, possibly retesting the December 22nd, 1999, high of 71.00. However, I do feel that the December 3rd, 1999 high of 68.06 would need to be reached, as this is probably the next true long-term resistance level for ZION. I suspect that over the course of the next two to three years, pending good news and beating earnings estimates, that we could see ZION setting a new all time high (currently 75.87, set on April 21st, 1999). After all the stock has been on a bullish trend for over a year now, so it definitely has the momentum to continue higher. Some would say that this long-term bullish trend means that ZION is a bit overextended for its own good. While in most cases I would not disagree with these views, I am a little more confident in ZION as it has trended sideways for a few months, so to speak - taking a breather in hopes of not losing its upward momentum.

This ends another exciting episode of the Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the limelight.

Until Next Week,
Nich Sheldon

Broker Recommendations

Strong Buy         3
Buy                7
Hold               6
Sell               0
Strong Sell        0

Brokers Covering  16

DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: No
Temper Enrollment: No

Min/Max Investment = $5,000/Quarter

Reinvestment Fees - 
Dividend investment fees: None
Cash investment fees: None
Auto reinvestment fees: None Available

Transfer Agent:
Zions First Nat'l Bank

Corporate Headquarters:
One South Main, Suite 1134
Salt Lake City, UT 84111
Phone: (801) 524-4787
Fax: (801) 524-2129


Copyright 2003

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