In a new research report, the bank analysts at Deutsche Bank really do the deep-dive to find out which names are good for investors to buy now. In the report they cite better credit profiles, slower consumer deleveraging, improved capital levels and across-the-board cost saving as positives for the top stocks. They also point out that the end of the quantitative easing program, weak loan growth and declining mortgage production revenues as headwinds for some of the stocks.
Taking all the positive and negatives into account, Deutsche Bank has limited its top names to buy to six stocks in the large cap market sensitive area and the large regional banks.
Goldman Sachs Group Inc. (NYSE: GS) continues to be the gold standard of Wall Street banks. With a high net worth clientele, top investment banking and capital markets expertise, the firm continues to be a dominant force around the world. Very few firms can dictate who may be a customer; Goldman is one of those few. Investors are paid a 1.3% dividend. The Deutsche Bank price target is $181. The Thomson/First Call estimate is posted at $177.92. Goldman Sachs closed Tuesday at $168.73.
J.P. Morgan Chase & Co. (NYSE: JPM) is one of the top six names to buy at Deutsche Bank. The company may be nearing the end of a very long stretch of losses and penalty pay-outs. Between mortgage settlements and trading gaffes, the company has taken a PR beating and has still held up well. The mega-cap bank is expected to benefit from commercial loan growth and an upturn in capital spending. Investors are paid a 2.7% dividend. The Deutsche Bank price target is $66, and the consensus target is $65.45. J.P. Morgan closed Tuesday at $57.26.
Fifth Third Bancorp (NASDAQ: FITB) is a top regional banking name that makes the grade at Deutsche Bank. The company recently cleaned up some headline risk when it settled an SEC accounting charge issue. Plus, during 2013 the bank reduced its common shares outstanding by 3%, as it repurchased a net $912 million in shares. Investors receive a 2.2% dividend from this leading Midwest bank. The Deutsche Bank price target is $21 and looks poised to go higher. The consensus price target is $23.60. Fifth Third closed Tuesday at $21.96.
PNC Financial Services Group Inc. (NYSE: PNC) is a top stock to buy, and Executive Chairman Jim Rohr is well liked by major firms on Wall Street. His strong leadership and guidance has helped turn the bank into a central and East Coast powerhouse. CEO Bill Demchak recently said that for years PNC has been “planting seeds” to draw in new customers, and as a result it had “the opportunity to move these new clients toward the depth of product penetration we enjoy with our longer-term clients,” which ultimately represented “significant potential to generate new fee income.” The Deutsche Bank analysts like the new direction and have put an $86 price target on the stock. The consensus is even higher at $87.63. PNC closed Tuesday at $82.03. Investors are paid a 2.2% dividend.
Regions Financial Corp. (NYSE: RF) is a name that almost every Wall Street firm likes, but it has traded sideways since last summer. One very positive area was the growth in loans came primarily from business lending, which was led by its commercial and industrial segments. Regions also experienced especially strong growth in auto lending, which was driven by an expanded dealer network and more accepted loans per dealer. Investors are paid a 1.1% dividend. The Deutsche Bank target is set at $12, and the consensus figure is at $11.59. Shares ended Tuesday at $10.78.
Sun Trust Banks Inc. (NYSE: STI) reported fourth-quarter 2013 results and adjusted earnings not only surpassed the consensus estimate, but also increased 19% on a year-over-year basis. Lower provision for credit losses and prudent expenses management were the quarter’s highlights. Some Wall Street firms also believe that the dividend is likely to grow this year. Investors are currently paid a 1.1% dividend. The Deutsche Bank price target is $39, and the consensus number is higher at $41.28. The stock closed Tuesday at $38.21.
With sector fundamentals improving, the top stocks to buy are very good additions to any well-rounded portfolio. The added kicker of consistent and rising dividends also adds to the total return potential. With the market not expected to show the kind of huge upside last year brought, these may be just the right names to add now.
Top Gaining Stocks
Top Losing Stocks