Despite facing turbulence over the past few years, the US banking sector has always been an attractive investment option for investors.
One of the pathways that helped this sector to improve over the years was the Dodd-Frank Regulation, which not only served as a backbone for the sector’s lending departments, but also helped increase its operational efficiency by encouraging banks to increase their capital reserves.
The Dodd-Frank regulation has also helped the financial sector as it led to the formation of Financial Stability Oversight Council, which oversees and encourages a smoother communication among the nine financial regulatory bodies.
Amid speculations that the Federal Government may tighten the borrowing rates, which in turn will increase the main revenue source for bankers, the banking sector is all set to see a boom in the near future.
In reference to the context above, lets have a look at the top three financial stocks that have been performing consistently well in the recent past, and which also have the potential to even boost their performances in the future as soon as the Fed’s new regulations come into effect.
People’s United Financial
People’s United Financial (NASDAQ: PBCT), currently trading at a price of $15.87, has an estimated yearly dividend yield of 4.30%. Based in Connecticut, the bank operates in commercial and consumer banking segments and offers services mainly in the savings and loans fields.
With 1.73% annual revenue growth and 3.34% net annual income growth rate, it has announced an annual dividend yield of 0.89% this September. People’s United Financial has been consistently paying dividends and this quarter it has committed to pay $0.17 dividend per share.
With 1.31 dividend coverage ratio and trailing annual cash flow of $274.7 million, the company has recorded average revenue to free yearly cash flow ratio of 22.38% in the past five years.
BB&T (NYSE: BBT), currently trading at a price of $38.96, has an estimated yearly dividend yield of 3.18%. Based in Winston-Salem, North Carolina, BB&T operates in commercial banking, consumer banking, insurance and mortgage segments and offers services in the field of investment banking.
With 4.13% annual revenue growth and 1.74% net annual income growth rate, the bank has announced an annual dividend yield of 5.72% this September. The bank has been paying dividends on a consistent basis and its current quarterly dividend pays $0.30 per share.
With 2.18 dividend coverage ratio and trailing 12 month cash flow of $3.75 billion by June 2016, the company has recorded average revenue to free yearly cash flow ratio of 41.62% in the past five years.
Currently trading at a price of $66.59, JPMorgan Chase (NYSE: JPM), has an estimated yearly dividend yield of 2.88%. In spite of having quite a few regulatory settlements within its huge conglomerate, JPMorgan has still managed to emerge as one of the most efficient banks.
It operates in the commercial banking, consumer banking, community banking, corporate banking, investment banking and asset management sectors.
Though its annual revenue growth rate has been a bit low at -1.65%, its effective expense management policy has helped it record a net annual income growth rate of 12.4%. The bank has also announced an annual dividend yield of 8.33% for the quarter ending in 30 September, 2016.
With 3.07 dividend coverage ratio and trailing 12 month cash flow of $18.38 billion by June 2016, the company has recorded average revenue to free yearly cash flow ratio of 70.48% in the past five years.