Heard about U.S. Bancorp (NYSE:USB) lately? Probably not, and that’s a good thing. U.S. Bancorp (NYSE:USB) is the big bank with small drama: quietly — but profitably — going about its business year in and year out, and rewarding the patient, insightful investor who’s looking for something a bit off the beaten path.
As a quick way of introduction to U.S. Bancorp, here are seven of my favorite things about this often overlooked bank.
1. U.S. Bancorp is a bigger bank than you think
Again, it’s not bank that’s in the news everyday, but for its size, it easily could be. With more than $353 billion in total assets, it’s the seventh largest bank in the country, just ahead of The Bank of New York Mellon Corporation (NYSE:BK), another low-drama bank that rewards the patient, long-term investor.
In and of itself, being big means nothing. But a big bank that’s well-managed and conservatively run — like U.S. Bancorp — means it has enough resources and reach to generate profit, but likely won’t get itself, or its investors, into trouble.
2. Great 2012 share-price performance
We all know that investor darling Bank of America Corp (NYSE:BAC) returned better than 100% for investors in 2012, but less well-known is the fact that shares in U.S. Bancorp gained a big 15.81% in the same time period.
3. Great return on assets
ROA measures how well a company performs relative to its total assets and is broadly a measure of management effectiveness.
U.S. Bancorp’s ROA is a big 1.58% trailing 12 months. JPMorgan Chase & Co. (NYSE:JPM)‘s ROA is only 0.92% TTM — this from a bank widely recognized to be very well run.
4. Great return on equity
ROE is another measurement of management effectiveness, and looks at the amount of net income a company makes with its shareholder’s money.
U.S. Bancorp’s ROE is a big 14.59% TTM, significantly better than JPMorgan’s 10.98%, and slightly better even than the normally indomitable Wells Fargo & Co (NYSE:WFC), which has an ROE of 12.89%.
5. Solid fourth-quarter earnings
In the fourth quarter of 2012, U.S. Bancorp grew its revenue by 5.1% year over year, and its net income by 5.2% year over year. Not staggering, but solid, and easily beating B of A’s -20.7% and -63.2% for the same respective categories.
6. U.S. Bancorp pays a solid dividend
2.3% isn’t the biggest dividend in the world, but it’s healthy. Wells Fargo & Co (NYSE:WFC) only pays 2.7%, The Bank of New York Mellon Corporation (NYSE:BK) only pays 1.9%, and investor-favorite B of A only pays 0.3%.