Banks Finally a Buy?
Patrick is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
According to the Wall Street Journal, banks are finally increasing lending. Since the Fed has committed to low rates for quite a while, these new loans should prove profitable, which could be why bank stocks have started to turn around.
The news attracted me to the sector. My own methodology valuing profits and dividends (I like companies that make money, and that give it to me) attracted me to the following names:
New York Community Bancorp, Inc. (NYSE: NYCB) beats the industry on most of the typical numbers. Specializing in loans to apartment buildings with below average rents, it was well positioned for the last few years, and now its numbers are starting to attract interest. As the entire market turns, its dividend of over 7% could justify a nice runup in price all by itself.
Bank of Hawaii Corp. (NYSE: BOH), the second largest in Hawaii, also rode out the last few years well in a location that, like Las Vegas, faced above average challenges with its dependence on tourism. Increasing optimism equals resort redevelopment and new condos equals new banking business.
City Holding Co. (NASDAQ: CHCO), runs the City National Bank of West Virginia. West Virginia has not had the ups and downs of New York or Hawaii, and CHCO has turned out a nice run of modest upside earnings surprises. It has started to attract smart money. If earnings are good again Monday, CHCO could have a nice bump.
The Motley Fool owns shares of Bank of Hawaii. SlowThought has no positions in the stocks mentioned above. 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.