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Two Banks Are Reporting Earnings and One Is My Top-Five Dividend Pick For 2013

NEW YORK ( TheStreet) - The summer heat is barely able to keep up with the financial sector, and two key players report the week of July 8. I'm bullish on both, but one in particular. Let's take a look at expectations and how you can profit.

JPM Chart JPM data by YCharts

JPMorgan Chase (JPM - Get Report) JPMorgan is a leader in investment banking, asset management, private banking, private equity, custody and transaction services and retail and middle-market financial services. A component of the Dow Jones Industrial Average, JPMorgan is headquartered in New York and trades an average of 23 million shares a day, with a market cap of $200 billion.

52-Week Range: $33.10 to $55.90

Book Value: $52.02

The upcoming second-quarter earnings report is highly anticipated by optimistic investors expecting growth before the market opens on Friday, July 12.

Analysts' mean profit appraisal is currently $1.41 a share, a gain of 20 cents (14.2%) from $1.21 during the corresponding quarter last year. Analysts' estimates this quarter range from $1.29 to $1.63 a share.

I believe JPMorgan will beat (a safe bet, considering it beat or met during the last 12 quarters), but I also think JPM will report at least $1.50. I'm not alone in my optimistic view of the bank, as 25 out of 31 analysts rate the stock a buy or strong buy, and only one has a sell rating.

Analysts overall have called this one correctly. In the last 12 months, the shares have accelerated 47% higher. The average analyst current target price is $57.79. I think the target is too low and expect an increase above $65 soon.

A 30% share price appreciation is reasonable, considering the single-digit earnings multiple and an improving housing market. Higher interest rates may dampen refinancing profits, but that horse was thoroughly beaten anyway. Now it's time to make money through original mortgages, and JPMorgan is positioned to benefit.

JPM Revenue Quarterly Chart JPM Revenue Quarterly data by YCharts
WFC Chart WFC data by YCharts

The second bank in focus is Wells Fargo (WFC - Get Report)

Wells Fargo is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services across North America, as well as internationally. Wells Fargo trades an average of 21 million shares a day with a market cap of $218 billion.
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