Bank and finance
Despite a reasonable run of second quarter results, many of the major monetary centers and regional banks either sold off some or just held on. The reality for growth investors is that many of the major U.S. banks now appear to be in solid value games, and with the seasonal slippery slope for equities fast approaching, it may make sense to shift some of the capital to the safest and highest paying dividend. banks.
One of the main reasons to be a little more optimistic about banks after profits is that at some point interest rates will rise. With inflation pushing the Federal Reserve closer and closer to the end of the massive quantitative easing program, perhaps now is the time to take a look at the major companies. Jefferies analysts view the industry as a value game and noted this:
We came out with a summary of the profits of the large-cap banks. Group profits largely saw loans stabilize, solid deposits, lower commissions and outstanding loans. Looking ahead, net interest income is expected to be mixed in Q3 with lending stabilization, lower yields on new loans / securities, positive deposit growth and an extra day. Additionally, the fee outlook expects IB / trading to normalize after another strong quarter. We have also moved more reserve releases in 2021 from 2022, with the consensus trend for reserve estimates. still biased downward on lower losses. The heart of the bank’s long-term thesis is: leverage for higher rates and economic improvement, improved reported earnings per share, strong returns on capital, and attractive relative valuations.
Seven banks were cited as the best ideas at Jefferies, but here we’re focusing on the five with the highest dividend payouts.
Fifth Third Bancorp
This top-tier super-regional banking action remains insanely cheap right now. Fifth Third Bancorp (NASDAQ: FITB) is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution.
As of March 31, 2021, the company had $ 207 billion in assets and operated 1,098 full-service banking centers and 2,383 Fifth Third-branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. and South Carolina. In total, Fifth Third provides its customers with access to approximately 53,000 free ATMs across the United States.
Fifth Third is among the largest fund managers in the Midwest and, as of March 31, 2021, had $ 464 billion in assets under watch, including $ 58 billion for individuals, corporations and nonprofits by the intermediary of its Trust and Registered Investment Advisory Firms.
The company posted very strong results, and many on Wall Street believe management’s guidance is very conservative.
Shareholders receive a dividend of 2.99%. The Jefferies price target for Fifth Third Bancorp stock is $ 46. The consensus target on Wall Street is $ 44.04. The shares closed Monday at $ 36.08.
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