Published:
March 31, 2008
The
correct answer is
(A.) U.S. Bancorp (USB)
For well over a century, U.S.
Bancorp -- the nation's sixth-largest
bank in terms of assets -- has given
shareholders stellar cash rewards
for their loyalty. Today the
Minneapolis-based firm operates over
2,500 branches in 24 states, mostly
in the western and midwestern parts
of the country.
USB is easily the most profitable
among its immediate peers, and with
returns on equity (ROE) north of
+22% on average and management's
ongoing goal to give back 80% of
profits, shareholders have
certainly been a happy bunch. In
fact, including its predecessors,
U.S. Bancorp has paid dividends for
145 consecutive years!
But USB is just one of many banks
that are generally fond of returning
the bulk of their profits to
shareholders. Most banks have payout
ratios of 50% or higher, and a good
chunk of the remainder is often
spent on share repurchases. However,
few industries have felt the direct
brunt of the painful subprime
mortgage sell-off quite like the
banking group. Fortunately, chaos
often creates opportunity for
selective bargain hunters.
But the more than 800 banks trading
on U.S. exchanges operate in many
different subsectors and respond
differently to changing economic
conditions. Investors need some way
to tell which bank stocks are money-making opportunities. With this in
mind, StreetAuthority editor Nathan
Slaughter took a look at the
industry in a recent issue of the
Half-Priced Stocks
newsletter, and offers an
in-depth analysis of today's banking
business, as well as a tutorial on
how to find the right bank
investment. Nathan specifically
lists five undervalued bank stocks -- most of
which are yielding well over
5% -- that are poised to survive
today's economic morass and take
shareholders on a swift ride up the
charts. To learn the names of these
stocks, and to learn more about the
Half-Priced Stocks
newsletter, please
visit this link.
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