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.
The article Leading American Banks, a Complete Review originally appeared on Fool.com 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.
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