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Citigroup Inc. (C), Bank of America Corp (BAC), Wells Fargo & Co (WFC): Leading American Banks, a Complete Review

Great performance in the past and ahead

Wells Fargo & Co (NYSE:WFC) is the second largest bank in the US by deposits, and the largest by branches. As such, Wells Fargo & Co (NYSE:WFC) has quite a protective earnings power; this was the thirteenth consecutive quarter of higher EPS and the eighth consecutive record; 10% YoY EPS growth for 2013 and 7% estimated for 2014. Despite net interest income down 3.5% from $11.1 billion to $10.7 billion, I state a Buy rating on WFC based on profitability and growth fundamentals:

Below I post the most salient facts about the bank:

• Wells Fargo & Co (NYSE:WFC)’s operating margin of 33.1% is ranked higher than 70% of the 915 companies of the industry, being the median 24% and its historical maximum 36%.

• Wells Fargo & Co (NYSE:WFC)’s EPS growth of 17.7% is ranked higher than 84% of the 915 companies in its industry.

• ROE estimated at 13.4% and ROA estimated at 1.47% make this bank one of the most efficient of its industry.

All in all, I recommend buying C and WFC but keeping an eye on USB if you haven’t got it in your portfolio yet; wait to buy when the price is clearly cheaper, because as the economy gets better financial stocks will keep on outperforming the benchmark.

Vanina Egea has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Citigroup Inc (NYSE:C) and Wells Fargo.

The article Leading American Banks, a Complete Review originally appeared on and is written by Vanina Egea.

Vanina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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