This Day On The Street
Continue to site
ADVERTISEMENT
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

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

4. U.S. Bancorp


Shares of U.S. Bancorp (USB - Get Report) 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ZION $30.83 -0.03%
BAC $17.80 0.17%
CMA $47.37 0.81%
CYN $89.47 0.30%
USB $45.22 0.31%

Markets

Chart of I:DJI
DOW 17,550.69 -47.51 -0.27%
S&P 500 2,093.32 -4.72 -0.22%
NASDAQ 5,105.5460 -9.8360 -0.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs