Migrating to Quality
U.S. Bancorp's shares have returned 7% this year, following a 21% return during 2011. The shares trade for 2.5 times tangible book value, according to Thomson Reuters Bank Insight. That is the highest price-to-tangible-book ratio among the 24 components of the KBW Bank Index. However, the shares trade for 10.3 times the consensus 2014 earnings estimate of $3.30 a share, which is a relatively low forward P/E ratio for a bank with such strong and consistent earnings. As discussed in TheStreet's 5 Bank Stocks That Can't Stop Posting Profits, the company was among only 34 actively traded banks to post positive returns on equity every quarter from the beginning of 2006 through the third quarter of last year, according to data supplied by Thomson Reuters Bank Insight. U.S. Bancorp has stood out among the largest U.S. bank holding companies, with a solid return on average assets (ROA) of 1.62% during 2012, and over the past 10 years, the ROA only slipped below 1% in 2009, when it was 0.82%, and the ROA was above 1.5% each year except for 2009 and for 2010, when it was 1.16%.
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