Big Bank Stocks to Watch as Financial Services Reports Earnings this Week

James Dennin, Kapitall: Big bank stocks release earnings this week, in what will likely be the stock market's biggest week so far this year.

As the year kicks off it's time for companies to begin reporting their earnings for the fourth quarter of 2013, and all eyes are on big bank stocks. Of the 25 companies on the S&P 500 reporting this week, over half will be in financial services.

Read more from Kapitall: 6 Foreign Stocks on US Exchanges that Bank on American Brand Names

But there's even more on the line as the earnings of banking stocks will provide some important insights into how the economy is doing.

That's because with the implementation of the Volcker Rule, many banks are seeing a lot of their high-risk, high-reward traders leave for other organizations, mostly investment funds and hedge funds. Earnings will provide important insights into how these banks are really faring – and whether they're actually growing or simply cutting costs. 

Which in turn will shed light on how the rest of the economy is doing. A lukewarm jobs report released at the end of last week indicates that the economy may be just puttering along, while the stock market soars.

This has created unusually low levels of price-to-earnings disparity in the stock market - with the exception of financial services stocks - whose valuations are still comparably very cheap. 

Big bank stocks have performed very well over the course of the last year, and still look inexpensive.

However, they will want to show strong earnings at a time when many companies are reigning in their forecasts, if bank stocks are going to continue their growth in 2014. And if mortgages and borrowing levels don't recover, this will be more difficult for big banks to accomplish. 

We built this list by looking at the seven top performing stocks in the financial services sector. Do you think they'll be able to continue their growth into 2014?

Click on the interactive chart to view returns over time. 

Do you see investing opportunities in the financial services industry? Use the list below to begin your own analysis. 

1. BB&T Corporation ( BBT): Operates as the financial holding company for Branch Banking and Trust Company that provides banking and trust services. Market cap at $27.16B, most recent closing price at $38.66.

Earnings: January 16
 

 

2. SunTrust Banks, Inc. ( STI): Operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. Market cap at $20.42B, most recent closing price at $38.39.

Earnings: January 17
 

 

3. Bank of America Corporation ( BAC): Provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments. Market cap at $177.81B, most recent closing price at $16.77.

Earnings: January 15
 

 

4. Capital One Financial Corp. ( COF): Holding company for Capital One Bank, National Association and Capital One, National Association, which provide various financial products and services. Market cap at $45.07B, most recent closing price at $78.02.

Earnings: January 16
 

 

5. Citigroup, Inc. ( C): Provides consumers, corporations, governments, and institutions with a range of financial products and services. Market cap at $165.03B, most recent closing price at $54.72.

Earnings: January 16
 

 

6. BlackRock, Inc. ( BLK): Provides its services to institutional, intermediary, and individual investors. Market cap at $53.29B, most recent closing price at $314.94

Earnings: January 16
 

 

7. The Goldman Sachs Group, Inc. ( GS): Provides investment banking, securities, and investment management services to corporations, financial institutions, and governments. Market cap at $81.28B, most recent closing price at $178.39.

Earnings: January 16

 

 

( List compiled by James Dennin, a Kapitall Writer. Yearly returns sourced from Zacks Investment Research, all other data sourced from Finviz.)

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