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TheStreet Open House

10 Big Banks Stocks to Watch In the 'Kitchen Sink' Quarter (Update 3)

Stocks in this article: BAC C WFC RF KEY FITB USB STI BBT COF PNC CMA MTB VNTV I:BKX

7. U.S. Bancorp


Shares of U.S. Bancorp of Indianapolis closed at $32.92 Monday, trading for 2.6 times tangible book value, and for 10.7 times the consensus 2013 EPS estimate of $3.08. The consensus 2014 EPS estimate is $3.32.

The shares returned 21% during 2012, following a 2% return in 2011.

Based on a quarterly payout of 19.5 cents, the shares have a 2.37% dividend yield.

USB will announce its fourth-quarter results on Jan. 16, with the consensus estimate being a profit of 75 cents a share, improving from 74 cents the previous quarter, and 69 cents a year earlier.

The market's high valuation of U.S. Bancorp's shares to tangible book value reflects the company's long-term record of steady and strong earnings. According to data supplied by Thomson Reuters Bank Insight, the company is among only eight publicly traded U.S. banks -- with average daily trading volume of over 50,000 shares -- that have shown profits for every quarter since the beginning of 2006, with returns on average tangible common equity exceeding 10% from the first quarter of 2010 through the third quarter of 2012.

The company's return on tangible common equity has ranged from 20.88% to 23.02% over the past five quarters.

Oppenheimer analyst Chris Kotowski rates U.S. Bancorp "Perform" and estimates the company will report fourth-quarter earnings of 75 cents a share, matching the consensus. His 2013 EPS estimate is $3.12.

Kotowski said on Dec. 20 that "USB has a remarkably stable business model, and most of the line items are highly predictable; we are expecting 5% loan growth by the end of 2013, somewhat lower than we had been previously been modeling, but see very little chance that this can't be made up on the fee side."

USB Chart USB data by YCharts

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

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