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3 Banks Holding Q1 Earnings Surprises From Guggenheim

Wells Fargo
Shares of Wells Fargo (WFC - Get Report) closed at $32.92 Tuesday, returning 20% year-to-date, following a 10% decline during 2011. Based on a 22-cent quarterly payout, the shares have a dividend yield of 2.67%.

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The shares trade for 2.1 times tangible book value, according to HighlineFI, and for nine times the consensus 2013 EPS estimate of $3.67. The consensus 2012 EPS estimate is $3.23.

Wells Fargo has been a strong earnings performer over the past two years, with a return on average assets (ROA) of 1.25% during 2011, increasing from 1.01% in 2010. The company's return on average common equity was 11.93% in 2011, increasing from 10.33% the previous year.

The company is scheduled to report its first-quarter results on Friday, with a consensus EPS estimate of 73 cents. Mosby estimates that Wells Fargo will post first-quarter EPS of 78 cents, with a full-year 2012 estimate of $3.43.

Guggenheim rates Wells Fargo a "Buy," with a $43 price target.

Mosby said on March 30 that "over time, if management can replicate the prior era of consistent earnings per share growth, we expect WFC to produce 13% to 18% in annualized total shareholder returns," and that "excess capital and compressed valuations should allow dividend yields to continue to build."

Interested in more on Wells Fargo? See TheStreet Ratings' report card for this stock.

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