In this article, we will be looking at the 10 best bank dividend stocks.
According to the Wall Street Journal, as of May 2021 investors have begun going on a banking stock investment spree, with about $32 billion dollars being invested in broad financial stocks by as early as May. As vaccination rates begin to gain headway across the world, with about 3.88 billion vaccine doses having been administered as of July 26th, 2021, the economic recovery and reopening seem right around the corner. As such, investors are picking just this moment to jump right back into bank stocks like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS).
According to Reuters, this June, investors considered consumer confidence data to restore their faith in bank stocks, which were responsible for the S&P 500 index rising to a new record high on June 29th. The S&P 500 index was able to gain about 020% while the Dow Jones Industrial Average was able to rise by about 0.48%, with the former being uplifted and supported by some of the biggest banks in the US. Additionally, just this July bank stocks again helped the FTSE rebound after its plunge in light of another surge in the rise of coronavirus cases and resurging concerns surrounding yet another economic crisis. Reuters has stated that the FTSE 100 was up 0.5% on July 20th with bank stocks being among the leaders supporting this gain and jumping by about 1.1%.
Additionally, with the S&P 500 having outperformed consensus estimates in the first quarter of 2021, for instance through its earnings growth for that quarter standing at 52% against the estimates of 24% according to a Russell Investments report, investors are steadily continuing to become more bullish on banking and finance stocks and thus more prone to pour money into the sector. With bank stocks thus being among some of the top contributors to both the S&P 500’s gains and to the FTSE’s advances, alongside the fact that the global economy can be safely considered to be on a path to recovery, opinions surrounding investing in banking and finance are becoming more optimistic. As such, we have compiled a list of the best bank dividend stocks, to point out some of the more popular stocks in the sector to invest in.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Without further ado, let’s take a look at the 10 best bank dividend stocks.
We have analyzed the data of about 866 hedge funds tracked by Insider Monkey to determine which stocks in the banking sector are the most popular among hedge funds. Alongside this, we have used analysts’ ratings and fundamentals as indicators of financial growth and stability to shortlist the stocks added to our list below.
Best Bank Dividend Stocks
10. KeyCorp (NYSE: KEY)
Number of Hedge Fund Holders: 41
Dividend Yield: 3.87%
KeyCorp (NYSE: KEY), the bank holding company for KeyBank National Associate, offers a range of retail and commercial banking products and services in the US. The company ranks 10th on our list of the best bank dividend stocks.
David Konrad, an analyst at Keefe Bruyette, took over coverage of KeyCorp (NYSE: KEY) this July. Konrad has a Market Perform rating on the shares, alongside a $21 price target. He also commented that he is still constructive on large-cap banks like KeyCorp (NYSE: KEY) in light of rising expectations that the Federal Reserve will raise short-term rates.
In the second quarter of 2021, KeyCorp (NYSE: KEY) had an EPS of $0.72, beating estimates by $0.18. The company’s revenue was $1.77 billion, up 3.26% year over year and also beating estimates by $40.52 million. KeyCorp (NYSE: KEY) has also gained 9.39% in the past 6 months and 17.25% year to date.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in KeyCorp (NYSE: KEY) worth roughly $565 million. This is compared to 29 hedge funds in the previous quarter with a total stake value of approximately $317 million.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), KeyCorp (NYSE: KEY) is a good bank stock to invest in.
9. Citizens Financial Group, Inc. (NYSE: CFG)
Number of Hedge Fund Holders: 41
Dividend Yield: 3.58%
Citizens Financial Group, Inc. (NYSE: CFG) is the bank holding company for Citizens Bank, National Association. It provides retail and commercial banking products and services in the US and ranks 9th on our list of the best bank dividend stocks.
Keefe Bruyette’s David Konrad has also assumed coverage of Citizens Financial Group, Inc. (NYSE: CFG) shares with an Outperform rating and a $54 price target this July.
In the second quarter of 2021, Citizens Financial Group, Inc. (NYSE: CFG) had an EPS of $1.46, beating estimates by $0.32. The company’s revenue was $1.61 billion, but missing estimates by $20.36 million. Citizens Financial Group, Inc. (NYSE: CFG) has also gained 17.76% in the past 6 months and 22.83% year to date.
By the end of the first quarter of 2021, 81 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citizens Financial Group, Inc. (NYSE: CFG) worth roughly $579 million. This is compared to 38 hedge funds in the previous quarter with a total stake value of approximately $453 million.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), Citizens Financial Group, Inc. (NYSE: CFG) is a good bank stock to invest in.
8. U.S. Bancorp (NYSE: USB)
Number of Hedge Fund Holders: 43
Dividend Yield: 3.02%
U.S. Bancorp (NYSE: USB) is a financial services holding company operating in the diversified banks industry to provide corporate, commercial, consumer, and business banking services in the US. It ranks 8th on our list of the best bank dividend stocks.
Oppenheimer’s Chris Kotowski has raised his price target on U.S. Bancorp (NYSE: USB) shares this July in light of the company’s positive Q2 results. The new price target is $73, versus the previous $70 target, and Kotowski has also held onto an Outperform rating on U.S. Bancorp (NYSE: USB) shares.
In the second quarter of 2021, U.S. Bancorp (NYSE: USB) had an EPS of $1.28, beating estimates by $0.15. The company’s revenue was $5.76 billion, also beating estimates by $136.74 million. U.S. Bancorp (NYSE: USB) has also gained 23.30% in the past 6 months and 20.82% year to date.
By the end of the first quarter of 2021, 43 hedge funds out of the 866 tracked by Insider Monkey held stakes in U.S. Bancorp (NYSE: USB) worth roughly $8.33 billion. This is compared to 60 hedge funds in the previous quarter with a total stake value of approximately $8.13 billion.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), U.S. Bancorp (NYSE: USB) is a good bank stock to invest in.
7. The Bank of New York Mellon Corporation (NYSE: BK)
Number of Hedge Fund Holders: 49
Dividend Yield: 2.7%
The Bank of New York Mellon Corporation (NYSE: BK) operates in the asset management and custody banks industry to provide financial products and services in the US and internationally as well. The company ranks 7th on our list of the best bank dividend stocks.
Stephen Biggar, an analyst at Argus, has very recently this July upgraded The Bank of New York Mellon Corporation (NYSE: BK) shares to Buy from Hold. Biggar also holds a $55 price target on the stock, citing the company’s overwhelmingly positive Q2 results for the upgrade.
In the second quarter of 2021, The Bank of New York Mellon Corporation (NYSE: BK) had an EPS of $1.13, beating estimates by $0.13. The company’s revenue was $3.96 billion, also beating estimates by $98.43 million. The Bank of New York Mellon Corporation (NYSE: BK) has also gained 20.88% in the past 6 months and 19.86% year to date.
By the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Bank of New York Mellon Corporation (NYSE: BK) worth roughly $4.76 billion. This is compared to 47 hedge funds in the previous quarter with a total stake value of approximately $4.68 billion.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), The Bank of New York Mellon Corporation (NYSE: BK) is a good bank stock to invest in.
6. The Goldman Sachs Group, Inc. (NYSE: GS)
Number of Hedge Fund Holders: 77
Dividend Yield: 2.1%
The Goldman Sachs Group, Inc. (NYSE: GS) operates through its Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management segments to provide financial services for corporations, institutions, governments, and individuals. The company operates globally and ranks 6th on our list of the best bank dividend stocks.
This July, Chris Kotowski from Oppenheimer also upped the price target on The Goldman Sachs Group, Inc. (NYSE: GS) shares from $493 to $540. Kotowski retained his Outperform rating on the stock as well.
In the second quarter of 2021, The Goldman Sachs Group, Inc. (NYSE: GS) had an EPS of $15.02, beating estimates by $4.84. The company’s revenue was $15.39 billion, up 15.74% year over year and also beating estimates by $2.99 billion. The Goldman Sachs Group, Inc. (NYSE: GS) has also gained 32.75% in the past 6 months and 41.15% year to date.
By the end of the first quarter of 2021, 77 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Goldman Sachs Group, Inc. (NYSE: GS) worth roughly $5.05 billion. This is compared to 77 hedge funds in the previous quarter with a total stake value of approximately $4.607 billion.
Artisan Partners, a high value-added investment management firm, mentioned The Goldman Sachs Group, Inc. (NYSE: GS) in its first-quarter 2021 investor letter. Here’s what they said:
“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”
5. Morgan Stanley (NYSE: MS)
Number of Hedge Fund Holders: 79
Dividend Yield: 2.96%
Morgan Stanley (NYSE: MS) is a financial holding company that operates in the investment banking and brokerage industry. It offers financial products and services to a range of consumers including governments and corporations, in the US, Europe, the Middle East, Africa, and Asia. The company ranks 5th on our list of the best bank dividend stocks.
Citigroup’s Keith Horowitz has raised his price target on Morgan Stanley (NYSE: MS) this July to $97 from the previous $88 price target. Horowitz has also retained his Neutral rating on the company’s shares and has commented that Morgan Stanley (NYSE: MS) is maybe the best-positioned bank out there.
In the second quarter of 2021, Morgan Stanley (NYSE: MS) had an EPS of $1.89, beating estimates by $0.23. The company’s revenue was $14.76 billion, up 10.03% year over year and also beating estimates by $763.58 million. Morgan Stanley (NYSE: MS) has also gained 32.78% in the past 6 months and 38.37% year to date.
By the end of the first quarter of 2021, 79 hedge funds out of the 866 tracked by Insider Monkey held stakes in Morgan Stanley (NYSE: MS) worth roughly $5.28 billion. This is compared to 66 hedge funds in the previous quarter with a total stake value of approximately $5.66 billion.
4. Citigroup Inc. (NYSE: C)
Number of Hedge Fund Holders: 90
Dividend Yield: 3.06%
Citigroup Inc. (NYSE: C) is a provider of financial products and services in North America, Latin America, Asia, Europe, the Middle East, and Africa. It operates through its Global Consumer Banking and Institutional Clients Group segments and ranks 4th on our list of the best bank dividend stocks.
Keefe Bruyette’s David Konrad has an Outperform rating on Citigroup Inc. (NYSE: C) with an $85 price target.
In the second quarter of 2021, Citigroup Inc. (NYSE: C) had an EPS of $2.84, beating estimates by $0.95. The company’s revenue was $17.47 billion, also beating estimates by $273.99 million. Citigroup Inc. (NYSE: C) has also gained 9.52% in the past 6 months and 10.92% year to date.
By the end of the first quarter of 2021, 90 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citigroup Inc. (NYSE: C) worth roughly $6.93 billion. This is compared to 95 hedge funds in the previous quarter with a total stake value of approximately $7.12 billion.
3. Wells Fargo & Company (NYSE: WFC)
Number of Hedge Fund Holders: 96
Dividend Yield: 1.8%
Wells Fargo & Company (NYSE: WFC) offers a diversified range of banking, investment, and mortgage products and services alongside consumer and commercial finance. It has roughly $1.9 trillion in assets and ranks 3rd on our list of the best bank dividend stocks.
Barclays’ Jason Goldberg has an Equal Weight rating on Wells Fargo & Company (NYSE: WFC) shares and has also raised his price target on the stock from $46 to $50 this July, citing the company’s Q2 earnings beat for the development.
In the second quarter of 2021, Wells Fargo & Company (NYSE: WFC) had an EPS of $1.37, beating estimates by $0.44. The company’s revenue was $20.27 billion, up 13.65% year over year and also beating estimates by $2.54 billion. Wells Fargo & Company (NYSE: WFC) has also gained 42.1% in the past 6 months and 50.13% year to date.
By the end of the first quarter of 2021, 96 hedge funds out of the 866 tracked by Insider Monkey held stakes in Wells Fargo & Company (NYSE: WFC) worth roughly $7.45 billion. This is compared to 99 hedge funds in the previous quarter with a total stake value of approximately $8.74 billion.
2. Bank of America Corporation (NYSE: BAC)
Number of Hedge Fund Holders: 97
Dividend Yield: 2%
Bank of America Corporation (NYSE: BAC) is a provider of banking and financial products and services across the globe. The company ranks 2nd on our list of the best bank dividend stocks.
Analyst David Konrad at Keefe Bruyette has assumed coverage of Bank of America Corporation (NYSE: BAC) shares this July with a Market Perform rating. The analyst also placed a $40 price target on the shares.
In the second quarter of 2021, Bank of America Corporation (NYSE: BAC) had an EPS of $1.03, beating estimates by $0.27. The company’s revenue was $21.47 billion, but missing estimates by $330.18 million. Bank of America Corporation (NYSE: BAC) has also gained 21.85% in the past 6 months and 25.54% year to date.
By the end of the first quarter of 2021, 97 hedge funds out of the 866 tracked by Insider Monkey held stakes in Bank of America Corporation (NYSE: BAC) worth roughly $45.3 billion. This is compared to 99 hedge funds in the previous quarter with a total stake value of approximately $35.3 billion.
1. JPMorgan Chase & Co. (NYSE: JPM)
Number of Hedge Fund Holders: 111
Dividend Yield: 2.39%
JPMorgan Chase & Co. (NYSE: JPM) is a global financial services company operating in the diversified banks industry. It has four segments, namely the Consumer and Community Banking, Corporate and Investment Bank, Commerical Banking, and Asset and Wealth Management segments. The company ranks 1st on our list of the best bank dividend stocks.
Credit Suisse has an Outperform rating on JPMorgan Chase & Co. (NYSE: JPM) shares as of this July, alongside a raised price target of $177 versus the previous price target of $170.
In the second quarter of 2021, JPMorgan Chase & Co. (NYSE: JPM) had an EPS of $3.78, beating estimates by $0.62. The company’s revenue was $30.48 billion, also beating estimates by $762.45 million. JPMorgan Chase & Co. (NYSE: JPM) has also gained 14.49% in the past 6 months and 19.68% year to date.
By the end of the first quarter of 2021, 111 hedge funds out of the 866 tracked by Insider Monkey held stakes in JPMorgan Chase & Co. (NYSE: JPM) worth roughly $5.25 billion. This is compared to 112 hedge funds in the previous quarter with a total stake value of approximately $6.96 billion.
You can also take a look at 10 Best Finance Stocks To Buy Now and 10 Best Consumer Finance Stocks To Buy Now.
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Disclosure: None. 10 Best Bank Dividend Stocks is originally published on Insider Monkey.
