10 Bank Dividend Stocks for 2022

In this article, we are going to talk about our list of the 10 bank dividend stocks to buy in 2022.

The Covid pandemic in 2020 was especially cruel to the banking sector of US economy. However, the banking sector finally seems to have regained its footing. Increase in vaccination rates, and the gradual return to pre-pandemic normalcy have allowed business to begin their journey towards recovery.

US Department of Commerce reports that gross domestic product (GDP) has jumped by 6.4% on an annual rate. Apart from that, big banks had placed bets on changing consumer spending habits, even before the pandemic forced the mainstream shift to digital platforms. In 2018, JPMorgan Chase & Co. (NYSE:JPM) dedicated $10.8 billion for technology spending, along with a further $5 billion set aside for fintech funding.

In Q3 2020, the company boasted 55 million active online users. HSBC Holdings plc (NYSE:HSBC) is another example of a large bank which spent $2.3 billion to enhance its global digital capabilities between 2015 and 2017. This preemptive strategy has contributed to the stability of the banking sector over the last few years, especially during the pandemic days. Today, the banking sector’s recovery is noteworthy, having outpaced the broader market by 14% since 2020.

Value investors are now enthusiastically looking towards bank stocks to make profits and ride the wave of economic recovery. The Wall Street Journal reported that in 2021, investors splurged $32 billion into financial stocks, a record for any year. With such potential for growth on the horizon, bank stocks are some of the most exciting investments to make today.

Some of the top bank stocks include The Bank of New York Mellon Corporation (NYSE:BK), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C), among others discussed in detail below.

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10 Bank Dividend Stocks for 2022

10. The Bank of New York Mellon Corporation (NYSE:BK)  

Number of Hedge Fund Holders: 46

Dividend Yield: 2.32% (as of January 4)

The Bank of New York Mellon Corporation (NYSE:BK) offers a range of financial services and products to customers in the United States and internationally, and operates through its segments: Investment Services, Investment and Wealth Management, and Other. The company declared a $0.34/share quarterly dividend, in line with previous.

The Bank of New York Mellon Corporation (NYSE:BK) has steadily increased its dividend payout over the years, with annual dividend in 2010 standing at $0.36, and increasing to $1.24 in 2020. The company posted an EPS of $1.04 for the third quarter, beating consensus estimates by $0.04. Quarterly revenue of $4.04 billion was above analysts’ forecasts by $88.43 million.

As of the third quarter, 46 hedge funds out of 867 tracked by Insider Monkey disclosed ownership of stakes in The Bank of New York Mellon Corporation (NYSE:BK). The combined value of these holdings stood at $4.65 billion. In contrast, 52 hedge funds held stakes worth $4.90 billion in the company a quarter ago.

Along with The Bank of New York Mellon Corporation (NYSE:BK), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C) are some of the top bank dividend stocks to buy in 2022.

9. JPMorgan Chase & Co. (NYSE:JPM)  

Number of Hedge Fund Holders: 101

Dividend Yield: 2.47% (as of January 4)

Next on our list is JPMorgan Chase & Co. (NYSE:JPM), a financial holding company which provides financial and investment services around the globe. It operates through its segments: Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management.

For the third quarter, JPMorgan Chase & Co. (NYSE:JPM) posted an EPS of $3.55, which was above consensus estimates by $0.55. The firm raked in $29.65 billion in revenue for the quarter, surpassing expectations by $12.88 million.

101 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM) at the end of the third quarter. The combined holdings of these hedge funds stood at $5.63 billion. This shows a downward trend from last quarter where 108 hedge funds held $4.92 billion worth of stakes in the company.

On December 9, UBS analyst Erika Najarian initiated coverage of JPMorgan Chase & Co. (NYSE:JPM) with a ‘Buy’ rating, and a $210 price target, noting that the stock’s “rare” year-to-date price underperformance relative to peers presents a unique and compelling buying opportunity.

Vltava Fund, an investment management firm, mentioned JPMorgan Chase & Co. (NYSE:JPM) in its Q3 investor letter. Here’s what the fund said:

“While all the previous names could be categorised as founder, continuing, or key shareholders, these last two names fall into the category of hired professional managers. This is actually the most numerous category among the bosses of large companies, but even among them there exist a number of individuals with exceptional long-term track records. In our view, these include also Jamie Dimon and Herman Gref.

We consider JP Morgan to be the strongest, largest, and most profitable bank in the world. It has not always been so, and the fact that it is what it is today can be attributed especially to its CEO Jamie Dimon. Dimon has spent his entire career in banking. He came to JP Morgan in a roundabout way in 2004 after the bank bought Bank One, of which he was CEO at the time. Since early 2006, Dimon has been CEO of the entire JP Morgan.

The quality and strength of JP Morgan under his leadership became fully apparent for the first time in 2008. Not only did JP Morgan help to stabilise the market by taking over the failing Bear Stearns in the spring of that year, but it was the only major US bank that did not require government assistance throughout the Great Financial Crisis and that was highly profitable even in the difficult year of 2008. Today, JP Morgan is even bigger, even more profitable, and even stronger than ever before. Many investors view banks with disdain, but a good bank with good management can be a very good long-term investment. From the time of its merger with Bank One in 2004 through the end of 2020, JP Morgan’s stock has outperformed even the S&P 500 index. The bank has earned a total net profit of USD 330 billion during this period, of which USD 232 billion has been paid out to shareholders in dividends and in share buybacks. I can recommend two books about Jamie Dimon: The House of Dimon and Last Man Standing.”

8. The Goldman Sachs Group, Inc. (NYSE:GS)  

Number of Hedge Fund Holders: 74

Dividend Yield: 2.04% (as of January 10)

The Goldman Sachs Group, Inc. (NYSE:GS) is a multinational investment bank and provider of financial services. On January 3, Barclays analyst Jason Goldberg maintained an ‘Overweight’ rating on the company stock, raising the price target to $556 from $483. Goldberg sees bank stocks continuing to outperform the broader market in 2022, and net interest margins to improve on the back of higher interest rates.

The Goldman Sachs Group, Inc. (NYSE:GS) took the top spot for advising mergers and acquisitions in 2021, taking up a 24.1% market share in an industry valued at above $5 trillion for the year. The company has held the top spot in mergers and acquisitions for the fifth year in a row.

Investors are loading up on The Goldman Sachs Group, Inc. (NYSE:GS) stock. 74 hedge funds in Insider Monkey’s database held The Goldman Sachs Group, Inc. (NYSE:GS) stock in their portfolios at the end of the third quarter, worth a combined value of $5.45 billion. In comparison, 61 hedge funds reported holding stakes in the company a quarter ago.

In October, The Goldman Sachs Group, Inc. (NYSE:GS) reported a $2.00/share quarterly dividend, which was in line with previous. The firm has significantly improved its dividend payout over the last 10 years, moving from $1.40 to $6.50 in annual dividend yield from 2011 to 2021, respectively.

The Goldman Sachs Group, Inc. (NYSE:GS) reported earnings per share of $14.93 for the third quarter, beating consensus estimates by $4.92. Quarterly revenue of $13.61 billion was above expectations by $1.99 billion.

7. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 65

Dividend Yield: 2.79% (as of January 4)

Morgan Stanley (NYSE:MS) is a multinational financial holding company that provides investment banking and financial services to clients through its segments: Institutional Securities, Wealth Management, and Investment Management.

On December 3, Citi analyst Keith Horowitz upgraded Morgan Stanley (NYSE:MS) to ‘Buy’ from ‘Neutral’, raising the price target from $105 to $115. The analyst cited the recent pullback in bank stocks as incentive to build positions in big industry names. He expects further multiple expansion for the firm as it delivers on its wealth management opportunity, and “is awarded a growth multiple”. According to the Citi analyst, Morgan Stanley (NYSE:MS) is a high quality stock at a reasonable price.

Out of the 867 elite hedge funds tracked by Insider Monkey, 65 reported owning stakes in Morgan Stanley (NYSE:MS) at the end of the third quarter. The overall value of these holdings was $4.99 billion. In contrast, 69 hedge funds held stakes worth $5.34 billion in the firm a quarter ago.

Investment firm Artisan Partners mentioned Morgan Stanley (NYSE:MS) in its Q3 investor letter. Here’s what the fund said:

“Morgan Stanley, a leading global financial services company, came into the portfolio in late 2020 as a result of its purchase of E*TRADE. The acquisition is a great fit for Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily derisked the business by adding less volatile fee streams to complement its leading positions in cyclical businesses such as advisory, equities and FICC (fixed income, currencies and commodities). We believe the company will prove its resiliency and value over the long term.”

6. Citigroup Inc. (NYSE:C)  

Number of Hedge Fund Holders: 79

Dividend Yield: 3.23% (as of January 4)

Next up is Citigroup Inc. (NYSE:C), a New York-based financial services firm which operates through its segments: Global Consumer Banking, Institutional Clients Group, and Corporate and Other. In October, the firm declared a $0.51/share quarterly dividend, with the forward yield standing at 2.89%.

Citigroup Inc. (NYSE:C) posted an EPS of $2.15 for the third quarter, beating analysts’ estimates by $0.36. Revenue for the quarter was $17.15 billion, which was above consensus estimates by $223.95 million.

79 hedge funds reported owning stakes in Citigroup Inc. (NYSE:C) at the end of the third quarter worth approximately $5.6 billion. This shows a downward trend from the previous quarter where 87 hedge funds held around $6.2 billion worth of stakes in the company.

In addition to Citigroup Inc. (NYSE:C), The Bank of New York Mellon Corporation (NYSE:BK) and JPMorgan Chase & Co. (NYSE:JPM) are some of the top bank dividend stocks attracting the attention of investors in 2022.

5. U.S. Bancorp (NYSE:USB)

Number of Hedge Fund Holders: 42

Dividend Yield: 3.21% (as of January 4)

U.S. Bancorp (NYSE:USB) is a US-based bank holding company which offers multiple financial services including cash management, lending and depository services, foreign exchange, and trust and investment management. The firm reported an EPS of $1.30 for the third quarter, which beat consensus estimates by $0.14.

U.S. Bancorp (NYSE:USB) declared a $0.46 per share dividend for the third quarter. The company has upped its quarterly dividend by 10% starting in Q3 2021, in the wake of the Federal Reserve’s bank stress tests.

On December 9, UBS analyst Erika Najarian initiated coverage of U.S. Bancorp (NYSE:USB) with a ‘Buy’ rating and a $70 price target. The analyst noted that the stock was “not so boring anymore”, given its approximately 300 basis points of ROTCE outperformance. The analyst cites the bank’s decision to use their share currency to buy Union Bank, and to double deposit market share in California as reasons for the ‘Buy’ rating.

As of the third quarter, 42 hedge funds were bullish on U.S. Bancorp (NYSE:USB) stock, showing a positive trend from last quarter where 41 hedge funds reported holding stakes in the company.

4. Citizens Financial Group, Inc. (NYSE:CFG)  

Number of Hedge Fund Holders: 34

Dividend Yield: 3.17% (as of January 4)

Citizens Financial Group, Inc. (NYSE:CFG) is a commercial bank headquartered in Rhode Island. In October, the company reported quarterly dividend at $0.39 per share. As of the third quarter, 34 out of 867 elite hedge funds tracked by Insider Monkey reported ownership of stakes in Citizens Financial Group, Inc. (NYSE:CFG), with a combined value of $361.8 million. In contrast, 36 hedge funds held stakes worth $402.3 million in the company a quarter ago.

For the third quarter, Citizens Financial Group, Inc. (NYSE:CFG) reported an EPS of $1.22, which was above consensus estimates by $0.07. The company’s shares have soared 33.27% in the last 12 months.

On November 24, Morgan Stanley analyst Ken Zerbe resumed coverage of Citizens Financial Group, Inc. (NYSE:CFG) with an ‘Overweight’ rating and a $61 price target, citing the bank’s proven expense discipline, faster-growth loan categories, above-peer asset sensitivity, and potential for additional fee-based acquisitions as catalysts for share growth.

3. People’s United Financial, Inc. (NASDAQ:PBCT)

Number of Hedge Fund Holders: 19

Dividend Yield: 3.99% (as of January 4)

People’s United Financial, Inc. (NASDAQ:PBCT) is a bank and financial holding company which operates through its Commercial Banking and Retail Banking segments. The firm posted an EPS of $0.33 for the third quarter, which beat consensus estimates by $0.01. In October, the company declared a $0.1825/share quarterly dividend, amounting to a 3.9% yield for shareholders.

By the end of the third quarter, People’s United Financial, Inc. (NASDAQ:PBCT) stock was found in the portfolio of 19 hedge funds from the database of 867 elite hedge funds tracked by Insider Monkey. Last quarter, 24 hedge funds reported holding People’s United Financial, Inc. (NASDAQ:PBCT) shares.

2. New York Community Bancorp, Inc. (NYSE:NYCB)

Number of Hedge Fund Holders: 27

Dividend Yield: 5.48% (as of January 4)

New York Community Bancorp, Inc. (NYSE:NYCB) is up next on our list, and features an impressive dividend yield of 4.88%, after declaring a $0.17/share quarterly dividend in late October. The firm is a bank holding company which offers multi-family real estate loans and other financial services to clients in the United States.

For the third quarter, New York Community Bancorp, Inc. (NYSE:NYCB) posted an EPS of $0.31, which fell below consensus estimates by $0.01. The firm’s revenue of $333 million for the quarter failed to meet analysts’ expectations by $13.15 million.

By the end of the third quarter, 27 hedge funds were long New York Community Bancorp, Inc. (NYSE:NYCB), as compared to 30 hedge funds in the preceding quarter. Out of all the hedge funds tracked by Insider Monkey, Balyasny Asset Management was the leading shareholder of New York Community Bancorp, Inc. (NYSE:NYCB) shares, holding 7.2 million shares valued at $92.72 million.

1. TFS Financial Corporation (NASDAQ:TFSL)

Number of Hedge Fund Holders: 9

Dividend Yield: 6.27% (as of January 4)

TFS Financial Corporation (NASDAQ:TFSL) ranks 1st on our list of best bank dividend stocks. As of the third quarter, 9 out of 867 elite hedge funds tracked by Insider Monkey reported owning positions in TFS Financial Corporation (NASDAQ:TFSL). This was consistent from the previous quarter where the same number of hedge funds held stakes in the company.

TFS Financial Corporation (NASDAQ:TFSL) offers retail consumer banking services in the United States. In November, the bank declared a $0.2825/share quarterly dividend, boasting the highest dividend yield of all the bank stocks in our list with a 5.82% yield. The firm’s EPS of $0.06 for the third quarter was in-line with consensus estimates, while the revenue figure of $66.08 million was above analysts’ forecasts by $4.59 million.

TFS Financial Corporation (NASDAQ:TFSL) has been steadily improving its dividend payouts over the years. In 2014, annual payout was $0.14, and subsequently soared to $1.12 in 2020. As of December 16, the bank’s stock has seen a jump of 0.40% in the year to date. The bank’s originations remain strong, and its asset quality has seen significant improvement since the height of the Covid crisis.

Jim Simons’ Renaissance Technologies was the leading shareholder of TFS Financial Corporation (NASDAQ:TFSL) as of the third quarter. The billionaire’s hedge fund held 5.13 million shares of the bank valued at $97.84 million.

You can also take a look at 15 Best E-Commerce Stocks To Buy Now and 10 Best Long-Term Dividend Stocks to Buy and Hold.

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