Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Banks Stocks with Juicy, Market-Beating Yields

Companies / Banking Stocks Apr 03, 2013 - 01:42 PM GMT

By: Money_Morning

Companies

Tim Melvin writes: In the past, you used to be able to safely invest at the bank. But now, it might be wiser to invest in the bank, as the following institutions are looking more like attractive stocks to buy now.

Thanks to the U.S. Federal Reserve, interest rates will continue to be low for an extended period of time, meaning savers would be lucky to get 1%.


Meanwhile, bank stocks have gone from unloved and out of favor to being an industry on the verge of recovery - and able to pay dividends to shareholders.

Income investors have a new opportunity with certain bank stocks. Banks that eliminated or reduced dividend payouts to preserve capital during the crisis are now loosening the purse strings a bit.

For example, many regional banks are starting to reinstate and raise dividends. As residential and commercial real estate markets continue to stabilize, banks should start to grow once again and higher earnings will lead to very high rates of dividend growth.

These bank stocks should be part of every income investor's portfolio right now as the long-term prospects for capital gains in addition to income are excellent.

Here are a few that rank among the regional bank stocks to buy as they raise payouts.
Stocks to Buy Now: Three Banks That Will Actually Pay You
People's United Financial Inc. (Nasdaq: PBCT) is an example of a bank stock that can provide much needed income to investors.

The bank has more than 400 branches in the Northeastern part of the United States and more than $30 billion in assets. The bank is in solid financial shape with nonperforming loans at just 2% of all loans, well below the average U.S. bank right now.

People's United Financial has plenty of excess capital and the shares trade for less than book value. At today's price the stock yields 4.77%, far in excess of what you earn by actually depositing your cash in one of its branches.

The bank is committed to increasing shareholder value by repurchasing stocks in the open market. In the fourth quarter alone, People's United repurchased $4.7 million shares of stock at a total cost of $56 million.

In addition, shareholders can expect to see dividends grow at least as fast as the U.S. economy, allowing the bank's payout to keep pace with inflation.

American National BankShares Inc. (Nasdaq: AMNB) of Danville, VA is another example of a smaller regional bank that offers excellent dividend yield and growth potential.

The bank has 25 branches in its home state and neighboring North Carolina, with $1.2 billion in assets. The loan portfolio is one of the healthier you will see in the post-crisis environment, with troubled loans at just .66% of total loans. The bank also has one of the highest net interest margins right now with the spread at 4.27%.

The stock trades right around book value and at just 10% earnings so the shares are reasonably priced. The dividend yield is 4.27% and American National has plenty of capital so it should be able to grow the payout at a respectable rate going forward.

Citizens & Northern Corp. (Nasdaq: CZNC) is a smaller bank located in Wellsboro, PA that offers a superior dividend yield for its shareholders.

The bank has 26 branches and $1.2 billion in assets in its North Central Pennsylvania region. Many of the bank's branches are located in the Marcellus Shale region, which should provide the possibility of strong growth in the years ahead as demand for oil and gas increases and the United States works towards energy independence.

Right now the stock yields 5.1% and is reasonably priced at just 10 times earnings.

There's another reason some regional bank stocks are good "Buys" now. It's because this year will see a huge wave of consolidation in the industry. Here are a couple names investors should consider when hunting for stocks to buy.

Source :http://moneymorning.com/2013/04/02/stocks-to-buy-now-how-to-make-money-from-banks/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in