This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Big Banks With Solid Revenue

6. State Street

Shares of State Street (STT) of Boston closed at $41.37 Monday, down 10% year-to-date. Based on a quarterly payout of 18 cents, the shares have a dividend yield of 1.74%.

Second-quarter net income available to common shareholders was $502 million, or a dollar a share, increasing from $427 million, or 87 cents a share, in the second quarter of 2010. The net interest margin was 1.76% in the second quarter, contracting from 2.21% a year earlier. The operating ROA for the second quarter was 1.25%, according to SNL Financial.

Second-quarter Pre-provision net revenue totaled $740 million according to SNL, increasing 47% from a year earlier. Servicing fees increased 15.5% year-over-year to $1.1 billion in the second quarter, while investment management fees were up 24% to $250 million, and securities finance revenue increased 26% to $137 million. These operating improvements were partially offset by a 20% increase in total operating expenses to $1.6 billion, which the company said mainly reflected "the impact of the reduction in incentive compensation in the second quarter of 2010."

Following State Street's second-quarter announcement, Guggenheim Securities analyst Marty Mosby reiterated his buy rating for the shares with a $54 price target, saying the company's "operating expenses ramped up faster than expected as STT invested in its business operations and IT transformational program and merit increases were granted." Mosby believes that State Street's information technology initiatives will lead to "meaningful improvement by the fourth quarter as incremental expense savings from these initiatives begins to build momentum."

The shares trade for 9.7 times the 2012 consensus EPS estimate of $4.26, for, by far, the lowest forward P/E among this group of 10 bank stocks.

Analyst sentiment for State Street is very strong, with 15 out of 18 analysts rating the shares a buy, while the remaining three analysts all have neutral ratings.

6 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs