Time to buy bank stocks?

After drop, a potential bargain in bank stocks


Bank shares are so cheap and their dividends so high that some of the world's biggest investors now say the combination is unbeatable.


The last time Bank of America and Wells Fargo had yields that high was in the early 1990s, just before a 44 percent advance in financial stocks.


At Wells Fargo, the yield jumped to 5.5 percent on Sept. 28, 1990. The lender soared 120 percent the following year, compared with a 26 percent advance in the S&P 500. Wells Fargo's current indicated yield stands at 3.59 percent.


Dividend yields of U.S. banks now exceed those of telephone companies and utilities, which have averaged the highest cash payouts in the S&P 500 in the past five years, according to Bloomberg data.

The 30-member S&P 500 Utilities index yields a 2.88 percent dividend, 27 percent less than the KBW Bank index. The S&P 500 Telecommunication Services index yields 3.03 percent.

WFC on Google Finance

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