9. Banks are still viewed with suspicion post-crash: This despite the fact the banks are stronger than ever, which is all the more reason to get in now. And banks are only getting stronger and will increasingly be seen as a profitable way to invest.
10. Many banks already pay solid dividends: Wells Fargo pays 2.7%, JPMorgan and PNC Financial Services (NYSE:PNC) each pay 2.4%, and U.S. Bancorp (NYSE:USB) pays 2.3%. Not too bad for one of the oldest business models in existence.
11. Rising dividends and share buybacks: Many of the banks that just went through the Fed’s stress tests also had their proposed capital plans approved, leading the way for bigger dividends, share buybacks, or both.
12. Reasonable price-to-earnings ratios: Citi has a P/E of 18, but even that’s on the high side. JPMorgan sports a P/E of just 9.4, Goldman Sachs 10.53, and Wells Fargo just 11.1.
13. A solid crop of CEOs: Like them or not, JPMorgan’s Jamie Dimon and Goldman Sachs’ Lloyd Blankfein are two of the sharpest knives in the banking block. Both are excellent risk managers, even given — for Dimon — the London Whale.
Citi CEO Michael Corbat also seems to be just what his superbank needs: a buttoned-down, conservative banker who will do what’s in the best interest of the bank, even if shareholders don’t get things like dividend increases or share buybacks.
14. Rising return on equity: A classic metric for measuring bank performance from an investor perspective, ROEs are generally on the rise, as banks are slowly but surely figuring out how to make money in a post-crash, post Dodd-Frank world.
15. Fast-growing deposits: Again, this is making money the old-fashioned way. But as banks look for ways to make money in safer, more stable ways — and ways that conform to new, stricter regulations — deposits still matter.
Foolish bottom line
Banks are back: bigger, stronger, more stable, and better regulated than ever. This makes them an excellent place to invest, and it could be just the diversification your portfolio needs. Banks are just plain fun to research and look into, as well. I’m glad I finally looked into them, and I think you will be, too.
The article 15 Reasons to Invest in Bank Stocks Right Now originally appeared on Fool.com.
Fool contributor John Grgurich owns shares of Goldman Sachs, JPMorgan Chase, Chipotle Mexican Grill, Starbucks, and Whole Foods Market. Follow John’s dispatches from the bleeding heart of capitalism on
Twitter @TMFGrgurich. The Motley Fool recommends Chipotle Mexican Grill, Goldman Sachs, Starbucks, Wells Fargo, and Whole Foods Market. The Motley Fool owns shares of Bank of America, Chipotle Mexican Grill, Citigroup, JPMorgan Chase, PNC Financial Services, Starbucks, Wells Fargo, and Whole Foods Market.
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