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Hold BB&T Ahead of Earnings

If there are any concerns about BB&T, it's with the company's stress test known as CCAR, or comprehensive capital analysis review. This is the test conducted by the Federal Reserve, which is used to ensure that financial institutions have adequate capital planning to prevent the sort of "too big to fail" situations that impacted the American taxpayer at the height of the credit crisis.

Surprisingly, BB&T failed its last evaluation despite demonstrating arguably the best capital ratio within the sector. At the recent conference last month, management announced to shareholders that the bank had resubmitted its CCAR for review.

I don't anticipate there will be a problem this time considering the bank recently raised its dividend by 15%. The bank would not have enacted a dividend hike if capital and/or liquidity were a concern.

With that in mind, while I'm inclined to believe the bank still has a solid operation, I'm not convinced the stock has much more upside potential from current levels. Before buying, I would wait to hear what management says about results of the CCAR. That, along with improved results in commercial and residential lending, should offer better near-term clarity.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
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