U.S. Bancorp (USB): A Responsible Bank for the Long Term

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Citigroup, by contrast, trades at 18.7 times TTM earnings. Although analysts call for earnings to rise nicely by 12% annually, I would need to see some pattern of stability in terms of income and share price before paying that kind of a premium.

Bank of America trades at 14.2 times forward earnings (I use forward in this case because they had an awful 2012 and their earnings were just 25 cents per share). They are expected to build these up to $1.50 per share by 2015, however I’m hesitant to pull the trigger on this one until the foreclosure mess is a thing of the past and the company shows they can actually meet some of the earnings expectations ahead of them.

Not only is U.S. Bancorp (NYSE:USB) more cheaply valued that the other two banking giants discussed here, it is a better dividend payer with a much better track record of growth, income, and responsible practices. Sure, they had some bad loans on their books over the past few years (who didn’t?), but the number and credit quality of their bad loans pale in comparison to that of some of their rivals. USB simply seems like a long-term investor’s dream, while the other two still look very speculative at this point.

The article A Responsible Bank for the Long Term originally appeared on Fool.com and is written by Matthew Frankel.

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