This big Japanese bank stock still looks like a buy.
Mitsubishi UFJ Financial Group (MUFG 2.73%) stock is enjoying a bit of a relief rally Monday morning.
Shares of the Japanese financial holding company rose 2.7% through 11:25 a.m. ET on news that Japan’s Financial Services Agency (FSA) has determined the company violated client confidentiality rules and engaged in “improper conduct, including cases in which MUFG Bank tried to win underwriting business for [its] brokerage unit,” according to The Japan Times today.
Is this good or bad news for Mitsubishi UFJ?
Strange as it may sound, this appears to be good news for Mitsubishi UFJ. Although some news outlets are saying that the FSA has “penalized” the bank holding company, none of them state an actual fine of any sort being imposed. Rather, the penalty appears (so far) to consist only of a slap on the wrist, a request for an explanation of how confidentiality was breached, and a plan to prevent it from happening again.
Considering that the actual news of the FSA’s investigation was already in the water, so to speak, having been announced earlier in the month, today’s announcement of a (non) penalty can only be taken as good news for investors.
Is Mitsubishi UFJ stock a buy?
It’s possible we’re not getting the whole story here, yet, and that further actual penalties will be imposed at a later date. But for the time being, at least, the news just plain looks “good” for Mitsubishi UFJ, leaving the bull case for the bank holding company intact.
Valued at just 12.3 times trailing earnings, pegged for a 13.2% long-term growth rate by Wall Street analysts, and paying a respectable 2.6% dividend yield, Mitsubishi UFJ stock looks like a good buy for value, growth, and dividend investors alike.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.