Bank stocks could be in a position to do well in 2018.

Several factors are contributing to the health of the banking sector. The Fed raised interest rates 3 times in 2017,  which will improve margins for banks. Some de-regulation may hit the industry due to the Trump administration in the White House. The economy is also recovering, and banks may be in the mood to loan money again, meaning more profits.

We have selected four bank stocks to consider for 2018. They were selected based on whether they are currently in an uptrend and whether they pay a sustained dividend. All figures are current as of February 9, 2018.

Bank of America Corporation (BAC)

Bank of America continues to receive upgrades from analysts in terms of earnings expectations and target price. This is one of the big banks, with offices across the globe. It is involved in consumer banking, wealth management, global banking, and investments.

The chart shows that this stock has been in a sustained uptrend since July of 2016, although it has dipped slightly in the early months of 2018. This may be a base, and the stock could break upward out of this base. Its 50-day moving average is currently above the 200-day moving average, which is a bullish sign. The company has been beating analysts’ earnings estimates consistently.

  • Avg. Volume: 74,792,059
  • Market Cap: $307.899 billion
  • PE Ratio (TTM): 19.19
  • EPS (TTM): 1.56
  • Dividend & Yield:  0.48 (1.54%)

BB&T Corporation (BBT)

BBT is a community bank that offers residential loans, insurance, and commercial banking. It also makes agricultural loans and offers retirement accounts.

The bank is considered a conservative lender, and is therefore in good financial shape. There is no news to trade for this stock. It is simply a steady performer that continues to move upward as the economy expands.

In its most recent earnings report in January 2018, the company beat analyst estimates on both earnings and revenues. The stock has pulled back recently, and the 50-day moving average is threatening to cross below the 200-day moving average. This would be a bearish signal, so investors should watch the stock closely. 

  • Avg. Volume: 4,715,167
  • Market Cap: $40.297 billion
  • PE Ratio (TTM): 18.83
  • EPS (TTM): 2.74
  • Dividend & Yield: 1.32 (2.45%)

Credicorp Ltd. (BAP)

While this bank is based in Bermuda, it offers its services primarily in Peru as well as internationally. Its banking services include loans, trade finance, corporate financing, and pension funds. Credicorp also makes micro-loans and has a very low default rate on loans. The company also offers insurance.

Credicorp offers a dividend of 1.72%. The stock has been in a steady uptrend since last November. It broke out of a base in mid-May of 2017 on high volume but has pulled back in the first months of 2018. 

  • Avg. Volume: 281,167
  • Market Cap: $16.519 billion
  • PE Ratio (TTM): 18.07
  • EPS (TTM): 11.505
  • Dividend & Yield: 3.78 (1.72%)

JPMorgan Chase & Co. (JPM)

JPM may be headed for outstanding financial reports, according to Barclay’s. The company is growing its loan activity steadily with the expanding economy, and expects less regulation under President Trump.

It offers a wide range of banking and investment services and is known for its wealth management services. JPM partnered with InvestCloud in 2016 to expand its digital presence. The stock has been in a sustained uptrend since July of 2016, closing at an all-time high of $116.32 per share in January 26th, 2018 before pulling back to about $112 per share in the following days. JPM pays a dividend that is nearly 2%.

  • Avg. Volume: 14,807,998
  • Market Cap: $366.697 billion 
  • PE Ratio (TTM): 16.97
  • EPS (TTM): 6.31
  • Dividend & Yield: 2.24 (1.98%)

The Bottom Line

Several players in the financial sector are leading the economy as it expands. The four we have chosen look like they will do well in 2018.

Note that these stocks pay a dividend, which will provide income in addition to the stock price appreciation. If you reinvest dividends, you may expect your investment to grow faster as you add shares. 

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