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

5 Bank Stocks Ready to Rise With the Housing Recovery: UBS

4. U.S. Bancorp


Shares of U.S. Bancorp (USB) of Minneapolis closed at $32.10 Tuesday, returning 21% year-to-date, following a 2% return last year.

The shares trade for 2.6 times tangible book value, and for 10.4 times the consensus 2013 EPS estimate of $3.08. The consensus 2014 EPS estimate is $3.32. Based on a quarterly payout of 19.5 cents, the shares have a dividend yield of 2.43%.

U.S. Bancorp placed fifth in the UBS bank footprint ranking, with weighted home price growth rate of 5.24% in its market footprint.

U.S. Bancorp has been one of the strongest and most consistent earners among large U.S. banks, with operating returns on average assets (ROA) increasing steadily from 1.58% to 1.71% over the past five quarters, according to Thomson Reuters Bank Insight. The strong performance is reflected in the relatively high price-to-tangible-book ratio.

Ketron rates U.S. Bancorp a "Buy," with a $38 price target, saying on Oct. 17 after the company announced its third-quarter results that "the bank continues to post above average returns, was able to maintain its [net interest margin, or NIM] while there has been sharp contractions at peers, and has had above average loan growth."

The analyst added that "operating trends were positive across the board, and only slightly missed our estimate of $0.75 due to a higher than expected [loan loss reserve] provision."

USB set aside $488 million for credit losses during the third quarter, increasing from $470 million the previous quarter, but declining from $519 million a year earlier. The company said in its earnings release that its third-quarter loan losses "included $54 million of incremental charge-offs due to a regulatory clarification." Despite the increase in charge-offs, the company still added less to reserves than it charged-off, "releasing" $91 million in loan loss reserves, which boosted earnings.

Ketron estimates that U.S. Bancorp will earn $3.10 a share in 2013, followed by EPS of $3.40 in 2014.

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

3 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,045.55 -34.02 -0.20%
S&P 500 1,997.22 +0.48 0.02%
NASDAQ 4,561.8620 +4.1670 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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