Wells Fargo Shares Increase 40 Percent after Announcing a New Brand
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With $32.9 billion in client assets, Wells Fargo & Company (NYSE: WFC) officially launched its Abbot Downing brand Monday to serve the ultra high net worth client sector. Since the initial announcement in November last year, shares of Wells Fargo has gained almost 40 percent.
The new brand seeks to expand its market share among roughly 10,000 households in the U.S. that have $50 million or more in investable assets and together they control more than $1 trillion.
“Abbot Downing works with individuals and families to help them preserve and grow their assets across generations while building a lasting legacy,” said James Steiner, president of Abbot Downing.
Client assets at Abbot Downing have grown about 20 percent from $27.5 billion last November, when Wells Fargo first announced it would combine its Lowry Hill and Wells Fargo Family Wealth businesses under a new brand.
Wells Fargo is one of the few banks that produced an annual profit even during one of the worst economic downturns. Based on its new annual dividend now yielding 2.60 percent, it has a lot of room to give back even more to shareholders.
Wells Fargo’s ex-dividend date is approaching on May 2 and the company’s new dividend rate is $0.88 annually. The company’s current yield of 2.60 percent is identical to JP Morgan Chase’s yield (NYSE: JPM). Peers Bank of America (NYSE: BAC) and Citigroup (NYSE: C) aren’t so big on dividends.
Wells Fargo maintains solid fundamentals and a strong customer base. Wells Fargo’s fourth quarter 2011 earnings were reported at $0.73 per share. This result beat last year's fourth quarter results by 20 percent. Full year 2011 net income was $15.87 billion, up 28 percent from 2010. Net income available to common shares was $15.03 billion, up 29 percent from 2010. EPS increased in 2011 to $2.82 versus $2.21 in 2010.
Wells Fargo’s EPS is third in line with competitors JP Morgan, Citigroup, and Bank of America. JP Morgan leads with EPS at $4.48.
Motley Fool newsletter services recommend Wells Fargo & Company. The Motley Fool owns shares of Bank of America, Citigroup Inc , JPMorgan Chase & Co. and Wells Fargo & Company and has the following options: short APR 2012 $21.00 puts on Wells Fargo & Company, short APR 2012 $29.00 calls on Wells Fargo & Company, short OCT 2012 $33.00 puts on Wells Fargo & Company and short OCT 2012 $36.00 calls on Wells Fargo & Company. FarahLalani is long Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
