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Wells Fargo's Laughing All the Way to the Bank

NEW YORK ( TheStreet) -- Last week, TheStreet contributor Dana Blankenhorn called Wells Fargo (WFC - Get Report) boring.

Given the drama that surrounds rivals such as JPMorgan Chase (JPM) and Citigroup (C), Blankenhorn's description of Wells Fargo is appropriate, but when it comes to Wells Fargo's operational results, the bank is a hot ticket.

Wells Fargo's management has produced loan growth, diversified the company's business and maintained its standing as the No. 1 mortgage originator in the U.S. That, along with strong expense controls, helped Wells Fargo increase earnings by 10% in the fourth quarter, despite a 6% decline in revenue. The bank has also passed the Federal Reserve's stress test.

On Friday, the bank will report first-quarter results before the market opens. Investors should expect another "boring" performance, which means they will be laughing all the way to the bank. Analysts estimate the company will report earnings of 96 cents a share, up from earnings of 92 cents a share a year ago. Revenue is expected to be $20.59 billion, down 3.2%.

Shares of Wells -- trading recently at $48.54, down 12 cents -- are up 7% this year.

Wells' profit has been helped by lower expenses. It reduced its workforce by more than 6,000 in the second half of last year, helping it end the year with an efficiency ratio (a measure of expenses to revenue) of 58.5%, down from 58.8%, a year earlier. For banks, the lower efficiency ratio, the better.

Also, in the fourth quarter, average assets -- or assets that produce income -- increased 9%, helping Wells offset the effects of low interest rates.

Still, analysts remain skeptical. Of the 34 analysts who covers Wells Fargo, only 13 rate it at buy. Nineteen analysts rate it at hold and two have sell recommendations.

As with any other stock, it comes down to value. I've said this before: Wells Fargo offers strong long-term potential. And the first-quarter results -- good or bad -- won't change what management has built.

With the stock trading at just 11 times 2015 estimates, which is 2 points below the industry average, Wells Fargo remains the best bargain in banking.

At the time of publication, the author didn't hold any stock in the companies mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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