Investing

Pay Attention, The Best Bank Investment Today Are 'Super Regionals'

Austin Smith

Published: February 5, 2025 3:20 pm

24/7 Wall St. Key Points:

• Strong earnings were announced by big banks including JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Citigroup (NYSE: C), but now they seem fully valued
• With 4% dividend yields and exposure to quickly expanding markets, super regional banks including Comerica (NYSE: CMA), U.S. Bancorp (NYSE: USB), Regions Financial (NYSE: RF), and PNC Financial (NYSE: PNC) offer more appealing for investors today
• Also: most banks pay little to no interest, but one is paying 7-10x the national average, AND paying out $300 cash bonuses for new accounts today. Click here to learn more now. 

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Transcript:

[00:00:04] Doug McIntyre: So the banks and the investment banks had really bust out earnings. I mean, blew them out, right? Every single one of the biggies. So what do you think happens to those stocks now?

[00:00:18] Lee Jackson: Well, you know, they did good in the fourth quarter. They did extremely well in the fourth quarter, and they had a lot of steam through the last half of last year.

[00:00:27] Lee Jackson: But they’re getting to the point where for the big money center banks. for for B of A and J.P. Morgan and Wells and City, they’re starting to get a little bit rich. I mean, and this is rich comparatively speaking, rich for a bank is 11 times earnings. You know, when, you know, six months ago, they were at nine times earnings or eight.

[00:00:45] Lee Jackson: But if you own them now, there’s no reason not to hold them, you know, because they’re solid good investments. But boy, if you’re looking at them now in terms of new money, I’d be careful.

[00:00:56] Doug McIntyre: If you like banking, where do you go?

[00:01:02] Lee Jackson: Well, we wrote about this recently on 24 7 Wall Street and one good place for people to look is the big super regional banks and that can be Comerica based down in Dallas, which has got a ton of business and the symbol for that is CMA on the New York Stock Exchange. Another good one is U. S Bank Corp

[00:01:26] Lee Jackson: They’re based up in Minnesota. They have that huge stadium that the Minnesota Vikings play in. And then also Regions Financial, which is also down here in the south and is all over the south and into Florida. And they all pay about a 4 percent dividend and t upside at this juncture a more total return potential than the big money sort of banks

[00:01:49] Doug McIntyre: Listen, I understand the blowout earnings with the biggies, but it sounds to me like there’s at least a chance that now all of that is priced in.

[00:01:57] Lee Jackson: Yeah, I think so. And you could probably even throw PNC up into the mix. Oh, sure. They’re like kind of a super regional based in Pittsburgh. And uh, the good thing about a lot of these banks, especially Comerica and Region’s Financial, is they’re in fast growing areas of the market very fast. And the, where all the people are moving and

[00:02:21] Lee Jackson: It’s strangely enough, same with with U. S. Bank up in Minnesota in the upper midwest region. Those are solid growth areas. So I think for people thinking about adding some financials, they may be the best place to go. And again, after every big run, maybe it’s smart to buy half of if you’re going to buy 200 by 100.

[00:02:42] Lee Jackson: And see how earnings go for everybody on the regional side. And then maybe add some more, but with a 4 percent dividend and some good upside potential, they could be the best area to look at in the financial sector.