10 Financial Stocks With Double-Digit Gains in 2012

Bank of America (BAC)

Company profile: Bank of America is one of the largest financial institutions in the world, with lending operations in the consumer, small business, and corporate arenas as well as asset management and investment banking divisions.

The company just reported net income of $85 million, or 1 cent per share, for 2011, roughly in line with analysts' expectations, and it also showed improvements in key capital ratios. But it continues to face legal issues stemming from its 2008 acquisition of the troubled mortgage maker Countrywide Financial.

Investor takeaway: Bank of America faces lots of challenges before it returns to solid fiscal health, but investors apparently think they can be met, as its shares are up 31% this year, after losing 58% last year. S&P has it rated "hold." In a survey of analysts' ratings, S&P found six "buys," five "buy/holds," 17 "holds," and one "weak/hold."

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Barclays (BCS)

Company profile: Barclays, based in the U.K., is one of the largest banks in the world, and in addition to its retail and business customer operations in Europe, Africa and Asia, runs a a debt-focused investment bank, and it owns Barclaycard, a large credit card issuer.

Investor takeaway: Down 32% last year, its shares are up 28% this year. S&P's survey of analysts found that two have it rated "buy," one has it rated "buy/hold," and two have it rated "hold."

Morningstar analysts are extremely cautious, noting that: "For now, Barclays sports a healthy core Tier 1 ratio of 11% as of Sept. 30. Proposed changes in U.K. and global regulations may leave Barclays short of capital, and we now see a 50% chance that the bank will need to raise capital to meet higher expectations."

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