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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Regional Bank Stock Best Bets From KBW

U.S. Bancorp
Shares of U.S. Bancorp (USB) of Minneapolis closed at $31.59 Tuesday, returning 18% year-to-date, following a 2% return during 2011.

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The shares trade for 2.9 times tangible book value and for 111 times the consensus 2013 EPS estimate of $2.96. The high valuation to book reflects the company's very strong earnings relative to peers, with quarterly returns on average assets steadily increasing from 1.38% to 1.62%, during 2011.

The company on March 14 announced that it would increase its quarterly dividend to 19.5 cents from 12.5 cents, and that its board of directors had authorized the repurchase of up to 100 million common shares. Based on the new dividend payout, the shares have a dividend yield of 2.47%.

KBW on Wednesday raised its price target for USB by two dollars to $37, while also raising its first-quarter EPS estimate by a penny to 65 cents. The firm also raised its 2012 EPS estimate by two cents to $2.77, while leaving its 2013 estimate unchanged, at $3.15.

The 2012 estimates were increased "primarily to reflect stronger mortgage banking revenues," and KBW added that "the largest risk to our price target is the flattening of the yield curve and the pressure on net interest margins."

Interested in more on U.S. Bancorp? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

To submit a news tip, send an email to: tips@thestreet.com.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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