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Friday, October 15, 2021

The Future is Bright for the Top US Banks, All Buys


Many big Banks are trading at record low marks to their S&P 500 counterparts.

Looking through Bank of America Merrill Lynch’s banking research we found 4 with Buy ratings that pay solid dividends, and they look like really good buys in here.

Knowing that net interest income will drop with rates at historically low levels, and loan growth will slow with the economy to all but shut down, the future is bright for the Top banks in the industry.

Here they are

Citigroup: This Top bank is trading at the lowest marks since Y 2012, and it is the Top Merrill pick in the sector. Citigroup Inc. (NYSE:C) has approximately 200-M customer accounts and does business in more than 160 countries and jurisdictions. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.

Trading at a still very cheap 7.2X estimated Y 2020 earnings, it looks very reasonable now in this market.

Investors receive a 4.95% dividend. The Merrill price target for the shares is 60, but the Wall Street consensus target is 67. Citigroup stock closed trading on Thursday at 47.41/share.

Fifth Third Bancorp: This is a Top super-regional bank and cheap now. Fifth Third Bancorp (NASDAQ:FITB) is a diversified financial services company and the indirect parent company of Fifth Third Bank, an Ohio-chartered bank. It had $169-B in assets and operated 1,207 full-service banking centers and 2,551 ATMs with Fifth Third branding in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina.

Fifth Third is among the largest money managers in the Midwest. It had $399-B in assets under care, of which it managed $46-B for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses.

Things must be looking up at the bank as it announced this week it is hiring for nearly 1,000 positions in retail banking centers, mortgage and operations across its footprint, including a significant number in its Cincinnati HQ’s market. Open roles are available across Fifth Third Bank’s 10-state footprint and include 500 positions in retail, 350 mortgage sales and support positions and 100 positions in operations.

Shareholders receive a 6.81% dividend. Merrill has a 25 price target, and the consensus target is 25.50. Fifth Third Bancorp stock was last seen trading at 17.82 at the close Thursday in NY.

KeyCorp: This Top banks makes good sense for investors for the rest of Y 2020. KeyCorp (NYSE:KEY) operates as the bank holding company for KeyBank National Association, which provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses.

The company provides a broad range of sophisticated corporate and investment banking products, such as M&A advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the US under the KeyBanc Capital Markets banner.

Investors receive a 7.08% dividend. The 13 Merrill target price is less than the 16 consensus target. KeyCorp stock closed at 12.01 Thursday.

PNC Financial Services: This Top regional bank may be 1 of the best banking plays now. PNC Financial Services Group Inc. (NYSE:PNC) is one of the largest US diversified financial services organizations and the 7th-largest US bank by deposits, with $410-B in assets.

PNC provides retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; and wealth management and asset management. With consistent earnings growth and a very positive and growing loan portfolio, the company is another Top super-regional bank stock to own.

Shareholders receive a 4.85% dividend. Merrill has set a price target of 112. The consensus is at 127.33, but shares closed Thursday at 105.42.

Note: These 4 Top US banks are very cheap, pay dividends that should remain intact, are rated Buys and offer investors with a long-term time frame big opportunities.

Have a healthy happy Easter and Passover weekend, stay home, Keep the Faith!

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