Are These The Best Bank Stocks To Invest In Today?
For investors wondering why stocks are down today, this would be due to the current state of the economy. When it comes to determining this, some investors would turn to bank stocks. This part of the stock market is home to some of the biggest financial institutions in the country. As such, shifts and changes in the Federal Reserve’s monetary policies would impact these firms. At face value, with the Fed attempting to reel in inflation, raising interest rates would be among their most prominent moves. Because of this, most would argue that banks are among the key benefactors in such as monetary environment. Therefore, it would make sense that some investors are considering jumping on the top bank stocks in the stock market today.
For one thing, all this could be amplified this week as some of the biggest banks around look to report their latest quarterly earnings. Among the major names on tap tomorrow would be Wells Fargo (NYSE: WFC) and Citigroup (NYSE: C). Firstly, consensus Wall Street figures for Wells Fargo are as such. Current estimates are earnings of $0.83 per share on revenue of $17.5 billion. While this may result in year-over-year declines, the consensus price target for WFC stock on Wall Street now is about $54.62. This would suggest some upside from its current price of about $38.
Secondly, current consensus analyst forecasts for Citigroup are earnings of $1.66 per share on revenue of $18.32 billion. With interest revenue forming a sizable portion of Citigroup’s total revenue, some would argue that the company could have a good quarter. With all this activity among bank stocks, it would not surprise me to see investors eyeing the sector now. Should you be in this group, here are three more to watch now.
Bank Stocks For Your July 2022 Watchlist
JPMorgan Chase & Co.
Starting us off today, we have JPMorgan Chase, a multinational investment bank and financial services holding company. In fact, it is a leading financial services firm with operations worldwide. The company has over $4 trillion in assets and $285.9 billion in stockholders’ equity as of March 31, 2022. It provides investment banking and financial services for a wide range of customers. Today, the company reported it second-quarter financials.
Diving in, the company posted a revenue of $30.7 billion for the quarter. Credit costs were $1.1 billion, which includes a $428 million net reserve build and $657 million of net charge-offs. It also had $1.6 trillion of liquidity sources. During the quarter, it also distributed a common dividend of $3 billion or $1 per share. It also repurchased $224 million of common stock in its second quarter. Also, the company posted a net income of $8.6 billion for the quarter.
“JPMorgan Chase performed well in the second quarter as we earned $8.6 billion in net income on revenue of $30.7 billion and an ROTCE of 17%, with growth across the lines of business, while maintaining credit discipline and a fortress balance sheet,” said CEO Jamie Dimon. “In Consumer & Community Banking, combined debit and credit card spend was up 15% with travel and dining spend remaining robust. Card loans were up 16% with continued strong new account originations. In the Corporate & Investment Bank, we generated strong Markets revenue, up 15% as we helped clients navigate volatile market conditions.” Given this piece of news, is JPM stock worth adding to your portfolio of bank stocks right now?
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Morgan Stanley
Morgan Stanley is a multinational investment management and financial services company. The company is dedicated to providing first-class services to its clients. Global institutions, cutting-edge hedge funds, and industry innovators all turn to Morgan Stanley for services in market-making, sales, and trading, as the firm focuses on providing new forms of investment to generate superior returns.
Alongside its other big bank peers, investors would be keeping an eye on the company now. Getting straight into the details, Morgan Stanley’s latest quarterly results are less-than-ideal. According to the press release, the company’s total earnings per share for the quarter is $1.39. Additionally, its total quarterly revenue is $13.13 billion. For comparison, consensus estimates on Wall Street are $1.53 and $13.48 billion respectively. Overall, Morgan Stanley cites persisting deceleration in its investment banking revenue for its latest performance.
Providing some further context on all this is CEO James Gorman. He notes, “Overall the Firm delivered a solid quarter in what was a more volatile market environment than we have seen for some time. Strong results in Equity and Fixed Income helped partially counter weaker investment banking activity. We continue to attract positive flows across our Wealth Management business, and Investment Management continues to benefit from its diversification. Finally, we finished the quarter in a strong capital position to ensure we move forward with confidence.” It seems that as the major banks continue to deal with the overall volatility in financial markets, things could get bumpy moving forward. With all this in mind, would you consider MS stock worth investing in today?
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First Republic Bank
Last on today’s list, we have First Republic Bank, a full-service bank and wealth management company. It offers private banking, private business banking, and wealth management. The company also specializes in delivering exceptional relationship-based service and provides a complete line of financial products. Today, it reported strong second-quarter financials.
Firstly, revenue for the quarter was up by over 20% year-over-year at $1.5 billion. The company says that this reflects on the consistency of its client-focused model and culture. Notably, loan growth was very strong and credit quality also remains excellent. Secondly, the company also posted a net income of $433 million, increasing by 16% compared to a year earlier. The bank also declared a cash dividend for the second quarter of $0.27 per share of common stock, which is payable on August 11, 2022, to shareholders of record as of July 28, 2022.
For its wealth management segment, total assets were $246.8 billion at the end of the quarter, increasing by 2.5% year-over-year. Wealth management revenues totaled $232 million for the quarter, increasing by 26.4% year-over-year. In its investments segment, total investment securities for the quarter were $31.2 billion, an increase of 36.1% year-over-year. High-quality liquid assets, including eligible cash, totaled $28.2 billion, representing 14.7% of quarterly average total assets. With that in mind, is FRC stock a buy in your book?
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