3. U.S. Bancorp
(USB - Get Report)
of Minneapolis closed at $33.14 Monday, returning 25% year-to-date, following a 2% return during 2011, which was actually a rather good showing, considering that the
KBW Bank Index
was down 25% last year.
U.S. Bancorp's shares trade for 2.6 times tangible book value, according to Thomson Reuters Bank insight, which is the highest price-to-book ratio for the 24 components of the KBW Bank Index, and reflects the company's status as the strongest and most consistent earner among the index components with an operating return on average assets (ROA) ranging between 1.58% and 1.71% over the past five quarters. The shares trade for 11 times the consensus 2013 earnings estimate of $3.07, among analysts polled by Thomson Reuters.
Based on a quarterly payout of 19.5 cents, the shares have a dividend yield of 2.35%. U.S. Bancorp's board of directors in March authorized a program to buy back up to 100 million common shares. Through the first three quarters, the company bought back 17,122,303 shares, at an average price of $33.92, for roughly $581 million.
O'Connor expects U.S. Bancorp to payout out 75% of its earnings through dividends and share buybacks during 2013, with dividends increasing to $1.917 billion from $1.479 billion in 2012, and buybacks increasing to $2.161 billion from $2.005 billion.
The analyst expects U.S. Bancorp's dividend yield for 2013 to increase to 3.1%.
Interested in more on U.S. Bancorp? See TheStreet Ratings' report card for this stock.