This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

10 Bank Stock Picks: Heroes vs. Zeros

9. Wells Fargo

Shares of Wells Fargo (WFC - Get Report) closed at $26.07 Friday, returning 3% since Sept. 3, 2010. Based on a quarterly payout of 12 cents, the shares have a dividend yield of 1.84%.

The company and its investors have fared the best among the "big four" U.S. banks during a difficult year of regulatory clampdowns on mortgage servicing and foreclosure practices, the implementation of the Durbin amendment to lower fee revenue from debit card transaction charges, mortgage putback demands from investors, concern over eventual compliance with the enhanced Basel III capital requirements and exposure to European sovereign debt.

The company's third-quarter ROA of 1.29% was the best among the big four, although third-quarter earnings of $4.1 billion were boosted by an $854 million release of loan loss reserves. Please see TheStreet's earnings coverage for a full discussion of the company's third-quarter results.

The shares trade for 8.1 times the consensus 2012 EPS estimate of $3.20 among analysts polled by FactSet, and for 1.5 times tangible book value, according to SNL Financial.

Guggenheim Securities analyst Marty Mosby rates Wells Fargo a "Buy." In Mosby's 2012 Outlook for Large-Cap Banks published on Nov. 14, the analyst raised his price target for the shares to $37 from $31.50, based on a multiple of 10.8 times Guggenheim's 2012 EPS estimate of $3.44. Mosby noted that at the then price-to-book ratio of 1.4 compared "to a historical average of 282% price to tangible book value."

Out of 23 analysts covering Wells Fargo, 20 rate the shares a buy, two have neutral ratings, and one analyst recommends selling the shares.

3 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
BAC $15.42 0.06%
C $51.19 -0.37%
COF $78.51 -0.42%
JPM $59.54 -0.12%
OFG $16.81 0.54%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

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