Bank stocks could be in a position to do well in 2019.
Several factors are contributing to the health of the banking sector. The Fed raised interest rates three times in 2017, which will improve margins for banks. Deregulation will continue to hit the industry thanks to the Trump administration in the White House. The economy is also recovering and banks could look to continue loaning money, meaning more profits.
Here are the top four bank stocks to consider for 2019. These names were selected based on whether they are currently in an uptrend and whether they pay a solid dividend. All figures are current as of Oct. 6, 2018.
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 traded sideways for much of 2018. This may be a base, and the stock could break upward out of this base. Its 50-day moving average is close to its 200-day moving average, which is a bullish sign. The company has been beating analysts’ earnings estimates consistently.
- Avg. Volume: 51.8 million
- Market Cap: $303.5 billion
- PE Ratio (TTM): 14.25
- EPS (TTM): 2.12
- Dividend & Yield: 0.60 (1.98%)
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 June 2018, the company barely missed analyst estimates on earnings. 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: 3.12 million
- Market Cap: $38 billion
- PE Ratio (TTM): 14.5
- EPS (TTM): 3.39
- Dividend & Yield: 1.62 (3.31%)
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 1.94%. The stock had a good run at the end of last year, it's been trading sideways for much of 2018.
- Avg. Volume: 192,000
- Market Cap: $17.7 billion
- PE Ratio (TTM): 13.5
- EPS (TTM): 16.4
- Dividend & Yield: 4.30 (1.94%)
JPMorgan could still be headed for strong financial results. 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 traded sideways for the last few months, after trading at all-time highs in early 2018. JPM pays a dividend that is nearly 2%.
- Avg. Volume: 12.36 million
- Market Cap: $387 billion
- PE Ratio (TTM): 14.3
- EPS (TTM): 8.0
- Dividend & Yield: 2.24 (1.95%)
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 2019.
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.