3 Bank Stocks To Add To Your October Watchlist
As most seasoned investors would know, bank stocks usually usher in the quarterly earnings season in the stock market. Even now, this remains the case with some of the biggest banks in the U.S. continuing to post solid figures across the board. For the most part, this would be a welcome sign for most investors. Namely, this would be the case with supply chain bottlenecks and the ongoing pandemic potentially decelerating the recovering economy. As such, investors could be turning to banks to get a better feel for how the U.S. economy is doing now. Given the recent figures posted this week, things could be looking up.
Earlier today, Citigroup (NYSE: C), owner of the fourth largest bank locally, saw green across the board. In its third fiscal quarter, the company posted an earnings per share of $2.15 on revenue of $17.15 billion. For comparison, Wall Street’s estimates were $1.65 and $16.97 billion respectively. Not to mention, Citigroup posted a year-over-year surge of 48% in net income. According to the bank, all of this is thanks to its releasing of loan loss reserves and notable growth in its investment banking division. In fact, Citigroup’s investment banking revenue jumped by a solid 39% year-over-year to a cool $1.9 billion for the quarter.
Notably, even the largest U.S. bank, JPMorgan (NYSE: JPM) reported stellar figures in its quarterly earnings call yesterday. Overall, JPMorgan posted an earnings per share of $3.74 on revenue of $30.44 billion, topping consensus projections across the board. In the larger scheme of things, the strength in banks could translate to strength in the economy. Whether it is equity or consumer-related services, banks continue to thrive. Because of all this, should investors be watching these top bank stocks reporting earnings in the stock market today?
Best Bank Stocks To Buy [Or Sell] In October 2021
Bank of America Corporation
Bank of America (BAC) is a multinational investment bank and financial services holding company with headquarters in North Carolina. In fact, it serves a wide range of customers, from individuals to small and middle-market businesses and large corporations, totaling approximately 66 million consumer and small business clients. Impressively, the company’s award-winning digital banking serves approximately 41 million active users, with approximately 32 million of them being mobile users. BAC stock currently trades at $43.92 as of 10:24 a.m. ET.
Today, the company reported its third-quarter financials for fiscal 2021. Diving in, net income rose by 58% year-over-year to $7.7 billion or $0.85 per diluted share. A notable chunk of this income came from its consumer banking segment at $3 billion. The company says that it saw record consumer checking accounts at 34.2 million and also combined credit and debit card spending rose by 21% to $201 billion. Also, its global wealth and investment management segment posted a record net income of $1.2 billion.
BAC also reported a revenue increase of 12% to $22.8 billion for the quarter. CEO Brian Moynihan had this to say, “We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.” All things considered, is BAC stock worth adding to your portfolio right now?
Wells Fargo & Company
Next up, we have Wells Fargo, another bank stock that has just reported its earnings today. In essence, the company is a leading financial services company with $1.9 trillion in assets. It proudly serves one in three U.S. households and more than 10% of small businesses in the U.S. It is also the leading middle-market banking provider in the U.S. WFC stock currently trades at $45.64 as of 10:24 a.m. ET.
In its latest quarterly report, the company saw its profit increase by nearly 60% to $5.12 billion, or an earnings per share of $1.22. This topped the consensus estimate of 99 cents per share. Total revenue for the quarter was $18.8 billion. The company said that it is making investments in risk and regulatory-related work that come alongside investments in improving customer experience. This would include new digital and mobile capabilities, a new digital infrastructure strategy, and new products with unique value propositions like the Wells Fargo Reflect Card.
Furthermore, the company repurchased 114.2 million shares or $5.3 billion of common stock in this third quarter. Wells Fargo also increased its common stock dividend to $0.20 per share. The bank says that it continues to improve operating effectiveness and financial returns, in addition to the benefits it is experiencing from the economic recovery. Given the impressive financials this quarter, will you say that WFC stock is a top bank stock to consider owning right now?
Another banking titan in focus today would be Morgan Stanley. As with most of its peers, the firm specializes in offering wealth management, investment banking, and commercial financial services. Also similar to its peers, Morgan Stanley reported its latest fiscal quarter earnings figures earlier today. Because of this, MS stock could be in the limelight now. As it stands, the company’s shares currently trade at $98.79 as of 10:24 a.m. ET after gaining by over 40% year-to-date.
To highlight, Morgan Stanley raked in a total revenue of $14.75 billion for the quarter, exceeding estimates of $14 billion. Additionally, the company smashed earnings per share estimates as well. This is evident as its earnings per share for the quarter came in at $1.98 versus projections of $1.68. Furthermore, the bank is now looking at year-over-year gains of over 25% in both its revenue and net income. All of this would serve to highlight the company’s current momentum amidst a recovering economy.
According to Morgan Stanley, its acquisition of E-Trade and Eaton Vance are key growth drivers for the quarter. As a result of this move, the company’s wealth and asset management operations have and continue to grow. So much so that the bank attributes $400 billion in net new client assets to said acquisitions. CEO James Gorman highlighted that Morgan Stanley now manages total combined client assets of $6.2 trillion. Would all of this make MS stock a top pick among its bank stock peers now?