Here Are 6 Regional Banks That Pay Big Dividend Yields

Posted 18 Jan 2019 03:28 PM Edited 18 Jan 2019 03:36 PM

Here Are 6 Regional Banks That Pay Big Dividend Yields

 

Bank stocks have struggled recently, and large regional banks haven't been spared. The six stocks in the accompanying table have a one-year average return of negative 15%, dividends included.

 

But there is a silver lining: attractive dividend yields and improving payouts. Banking regulators, who kept banks on a short leash following the Great Recession a decade ago, have eased up in recent years and allowed larger share repurchases and dividend disbursements.


Of course, the high yields of these banks reflect poor stock performance recently. The SPDR S&P Regional Banking ETF (ticker: KRE) is off about 17% in the past year, though it's had a nice rally in early 2019.


Concerns about a slowing economy and eroding net-interest margins have trumped healthy loan portfolios and other signs of financial health at many banks.Three Ways Blockchain Will Revolutionize Finance


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Where regional-bank stocks go from here is hard to divine. Their performance hinges on the staying power of the U.S. economy, among other factors.


In a recent note, John Pancari of Evercore ISI wrote that an important question was, 'What will bring incremental investor dollars into the banks''


The answer includes a steeper yield curve and lower geopolitical tensions, he notes.


These six banks all sport yields above 3%. What's more, the price-earnings ratios of these banks are well below their five-year averages, potentially providing some downside protection.


Banking on Dividends


Concerns about slowing economic growth have depressed bank stocks, but these six sport big yields.


In its 2019 outlook, IHS Markit expects the banking sector to remain the top dividend payer globally. It sees U.S. banks raising their disbursements by 16.1% on average. That's lower than the 22.4% rise in 2018 which was driven by a cut in the corporate tax rate.


Trading at 11.1 times this year's profit estimate, U.S. Bancorp (USB) has the highest valuation of this group and the lowest yield of 3.1%.


The company on Wednesday reported that it earned $1.10 a share in the fourth quarter, up from $1.06 a year earlier. Pancari noted that he was encouraged by the banks efforts to grow revenue faster than expenses 'even if revenue is challenged.'


PNC Financial Services Group (PNC) yields 3.2%. The Pittsburgh-based bank on Wednesday reported fourth-quarter earnings of $2.75 a share, falling short of the FactSet consensus by a few pennies.


That's not expected to impact the dividend or share buybacks. Last year the company paid out $1.6 billion of dividends.


Citizens Financial Group (CFG) was recently yielding 3.8%, the highest in this group. The bank, based in Providence, R.I., has a branch network that stretches across the Northeast to the Midwest, as well as commercial operations.


The bank's loan book is pretty evenly divided between consumer and commercial credits, and its credit quality has looked sound.


Analysts are expecting the firm's 2019 profits to come in at $3.85 a share, up 9% from $3.51 in 2018.


Meanwhile, Comerica (CMA), which is more tilted to commercial loans, was recently yielding 3.2%.


The Dallas-based bank earned $1.88 a share in the fourth quarter, beating the consensus by a penny, according to FactSet. Pancari cited better-than-expected loan growth, good expense controls, and net interest margin expansion. Net interest income is essentially the spread what a bank earns on its assets, notably loans, and pays on its liabilities, deposits in particular.


Two other banks in the table are SunTrust Banks (STI), which is based in Atlanta, and Regions Financial (RF), headquartered in Birmingham, Ala. Their yields are 3.6% and 3.7%, respectively.


SunTrust is expected to earn $5.84 a share this year, compared with $5.68 in 2018. For Regions, it's $1.57 this year, versus $1.46 last year.

Company/Ticker

Recent Price

Market Value (bil)

Dividend Yield

1-Year Return

Estimated P/E Ratio

Citizens Financial Group/CFG

$33.10

$15.5

3.3%

-25.1%

8.6

Comerica/CMA

74.04

12.0

3.2

-19.3

9.2

PNC Financial Services Group/PNC

120.17

55.5

3.2

-18.9

10.5

Regions Financial/RF

15.11

15.6

3.7

-14.7

9.6

SunTrust Banks/STI

55.99

25.2

3.6

-15.8

9.6

U.S. Bancorp

47.97

77.5

3.1

-13.8

11.1


Aurora Cannabis (ACB)

Posted 15 Jan 2019 09:40 AM Edited 15 Jan 2019 09:42 AM
Canadian marijuana company Aurora Cannabis (ACB) made news Monday, after a week in which its rivals Tilray (TLRY) and Aphria (APHA) got all the attention. The Edmonton, Alberta-based Aurora will expand its brand offerings with the acquisition of the organic v producer, Whistler Medical Marijuana.

The Whistler brand will broaden Aurora's lineup'which includes brands like Aurora, AltaVie and San Rafael '71'while boosting Aurora's visibility in the populous and pot-loving province of British Columbia. The deal will be an all-stock transaction that the companies valued at $175 million.

Aurora stock was up almost 3.5% by midday on Monday to $6.58 on the New York Stock Exchange, where the shares are dual-listed with Toronto's exchange.

The stocks of Canada's marijuana producers have climbed 25%-35% since the year began'recovering from the selloff that followed Canada's clumsy launch of recreational sales, in which the licensed producers couldn't deliver enough product to fill store shelves. Shareholders of Aphria and Tilray got their own bits of good news last week: Aphria's embattled chief executive Vic Neufeld said he'll step aside, while Tilray's controlling stockholders said they won't start selling when an IPO lockup expires on Tuesday.

Although Aurora won't report its December quarter results until Feb. 11, the company wanted investors to know that the quarter went well. Last week, Aurora said it expects to report that the quarter's revenues exceeded 50 million Canadian dollars (or about $38 million). That would be a 68% sequential increase from the September stretch and more than double the C$22 million in sales that Aphria just reported for its quarter ended November. Falling prices hurt Aphria's margins, but Aurora's announcement said it expects to sustain its gross margins in 2019 by introducing higher-profit products like softgels, vape pens, beverages, and edibles. Like its rivals, Aurora will be expanding production throughout the year.

'Going forward, we see sustained strong demand from the adult usage market,' Aurora CEO Terry Booth said in a statement, 'as well as strong patient-driven demand for medical cannabis in Canada and abroad.'

Like its peers, Aurora expects to show positive cash flow, by some definition. The Canadian producers have yet to show profits and their big investments in production make their free cash flow quite negative. As Canadian marijuana stocks regain their airy market capitalizations, investors will have to decide which of these producers will grow into their already generous valuations.

GE Stock Is Suddenly in a Bull Market. Will It Last?

Posted 08 Jan 2019 03:54 PM Edited 08 Jan 2019 03:54 PM

Investor sentiment can change on a dime.

General Electric stock (GE) was rising for the sixth straight day on Monday, and up more than 25% from its 52-week low. That's a bull run. But is it a sign that things are turning around, or just a January bounce after back-to-back years in which GE stock dropped a whopping 45% and 57%, respectively'

It's difficult to say, but one thing we do know is there's a lot going on at GE these days. That includes planned business IPOs, management changes, new accounting pronouncements, and assets sales.

Monday's rise in the stock price is linked to an asset sale. Reports surfaced Friday night that Apollo Global Management (APO) is in talks to purchase GE's aviations services portfolio (GECAS) for up to $40 billion dollars. That amount refers to the total assets in the aviation services portfolio, which leases planes to airlines around the world. Aircraft leasing makes up about one-third of GE Capital's total $129 billion in assets. A GECAS sale could bring as much as $3 to $4 billion to company coffers. (That's based on GE Capital's total equity, as well as comparable aircraft lessor valuations.)

GE declined to comment about the reports. But while Apollo's interest is unconfirmed, GE management has talked about selling the GECAS portfolio on recent conference calls. CFO Jamie Miller said in October that 'we think [GECAS] is really advantaged because of its knowledge of the underlying assets, and due to that, we receive [acquisition calls] on this business all the time.'

Still, a GECAS sale may not be all that GE needs to do to restore investor confidence. Gordon Haskett analyst John Inch remains skeptical on GE stock, and he wrote to clients Monday morning that GE is 'disproportionately reliant on sustained strength of the aviation industry.' Inch said that if the aviation cycle turns down, GE Aviation and, presumably, GECAS cash flows could weaken. GE Aviation accounts for about 24% of GE's industrial revenue and 45% of GE's industrial operating earnings.


Oil Stocks That Could Ride a Rebound in Prices

Posted 03 Jan 2019 08:32 PM Edited 03 Jan 2019 08:36 PM

Oil Stocks That Could Ride a Rebound in Prices, According to Analysts

After starting the day lower, oil prices spiked Wednesday on signs that Saudi Arabia has been cutting exports, an indication that supply is growing more slowly.

West Texas oil futures rose 3.8% to $47.14, while Brent futures rose 4.5% to $56.22. Saudi crude exports fell about 500,000 barrels a day in December, according to Bloomberg. OPEC had agreed to cut production in December, but details about the cut were spotty, leading to skepticism on Wall Street. Oil stocks rose on the news, with Exxon Mobil (ticker: XOM) up 1.8% to $69.39 in recent trading.

After a tough 2018, experts expect the market to remain unpredictable.

'It is clear that this volatility will remain a feature across the energy markets in 2019,' said Chris Midgley, global head of analytics at S&P Global Platts.

But some analysts are betting that higher oil prices this year will lift exploration and production companies' shares.

Bernstein analyst Bob Brackett thinks expectations for supply and demand are overly bearish. Demand should continue to grow, and supply may rise less than expected, given the gridlock at major oil production spots such as the Permian Basin in the U.S., Brackett writes. Bernstein sees West Texas oil rising to $60, leading Brackett to recommend producers like Apache (APC), Anadarko Petroleum (APC), ConocoPhillips (COP), Concho Resources (CXO), Encana (ECA), EOG Resources (EOG), and Pioneer Natural Resources (PXD). His top pick is Hess (HES).

MKM Partners analyst John Gerdes put together a table of the stocks that are most impacted by changes in oil and gas prices. He calculated how much each stock's fair value would change under scenarios where the oil price shifted by $7.50 and gas prices changed by 25 cents. The median sensitivity was 58%, meaning the fair value of the stock could swing that far in that scenario.

The most sensitive exploration and production companies tend to have higher debt levels, so there could be high risk and high reward.

According to Gerdes' analysis, the most sensitive stocks include small-cap HighPoint Resources (HPR), whose fair value could move 120% based on changes in oil and gas prices. Chesapeake Energy (CHK), which has been expanding aggressively, is also highly sensitive to shifts in prices. Gerdes' base case sees Chesapeake rising to $3 from a recent $2.19.

The least price-sensitive company in the oil patch is Cabot Oil & Gas (COG), whose value could still swing 26% on a shift in commodity prices.


Starhub round top & Japfa round bottom

Posted 14 Dec 2018 01:56 PM Edited 14 Dec 2018 02:15 PM

Starhub round top. TP:$1.66


Japfa: round bottom. TP:$0.83 follow by $0.89


Twiiter forming a nice head an shoulder pattern

Posted 13 Dec 2018 05:08 PM Edited 13 Dec 2018 05:10 PM

Twitter's CEO deals with controversy 

Twitter shares were higher by 5% as the social media company's CEO chose to address criticism concerning personal decisions that the executive had made. Jack Dorsey had tweeted about going on a meditation retreat in Myanmar, but many activists were unhappy that the Twitter CEO had commented positively on the Asian nation without also mentioning the plight of hundreds of thousands of Rohingya citizens. Unlike what many other high-profile tech executives would have done, Dorsey acknowledged the validity of the criticism, saying that he hadn't intended to minimize the issue. That seemed to satisfy investors, allowing Twitter stock to participate in today's tech rally





JPMorgan is getting more bullish on Cisco Systems

Posted 07 Dec 2018 08:49 AM Edited 07 Dec 2018 08:50 AM

JPMorgan is getting more bullish on Cisco Systems stock and predicts solid returns for the networking giant next year.

The firm's analyst Samik Chatterjee added Cisco (CSCO) to JPMorgan's Analyst Focus List as a 'value idea.' He reiterated his Overweight rating and reaffirmed his December 2019 $59 price forecast for the company's shares.

'Cisco is now our top pick within our Networking Equipment/IT Hardware coverage given accelerating product momentum, secular transformation to software and recurring revenue, and greater upside from re-rating of the shares,' Chatterjee wrote on Thursday.

Cisco stock is down 1.5% to $46.67 on Thursday, although the shares are up more than 20% this year.

Last month, Cisco reported better-than-expected fiscal-first-quarter results, and gave a financial forecast about in line with consensus. It posted adjusted earnings per share of 75 cents for the October quarter, compared with the Wall Street average estimate of 72 cents, according to FactSet. Sales came in at $13.07 billion, versus the $12.86 billion consensus estimate. For the quarter, Cisco's Americas revenue rose 5% year-over-year, while revenue in Europe surged 11% and Asia grew 12%.

Chatterjee also noted Cisco's attractive valuation of 15 times next 12-months price-to-earnings ratio, and predicts continues strong financial results going forward.

'We expect sustained strong top-line momentum combined with modest margin expansion and strong capital allocation framework to provide earnings-related catalysts to investors,' he wrote.


Proshares trust ii vix short-term futures(UVXY)

Posted 06 Dec 2018 09:37 PM Edited 06 Dec 2018 09:37 PM

Proshares trust ii vix short-term futures(UVXY): It invests in volatile stocks of large-cap companies. The fund seeks to track 1.5x the daily performance of the S&P 500 VIX Short-Term Futures Index. ProShares Trust II - ProShares Short VIX Short-Term Futures ETF was formed on October 3, 2011 and is domiciled in the United States.



Pampa Energia : $35.08

Posted 30 Nov 2018 09:20 PM Edited 30 Nov 2018 09:25 PM




Shares of Pampa Energia S.A. (NYSE:PAM) were up 5.6% during mid-day trading on Thursday . The company traded as high as $36.03 and last traded at $35.08. Approximately 620,500 shares changed hands during trading, an increase of 42% from the average daily volume of 436,295 shares. The stock had previously closed at $33.23.

A number of analysts have issued reports on PAM shares. Bank of America set a $55.00 price target on Pampa Energia and gave the stock a 'buy' rating in a report on Friday, September 14th. HSBC started coverage on Pampa Energia in a report on Thursday, August 30th. They set a 'buy' rating and a $40.00 price target for the company. JPMorgan Chase & Co. set a $52.00 price target on Pampa Energia and gave the stock a 'buy' rating in a report on Wednesday, November 14th. ValuEngine raised Pampa Energia from a 'sell' rating to a 'hold' rating in a report on Wednesday, September 19th. Finally, Credit Suisse Group raised Pampa Energia from a 'neutral' rating to an 'outperform' rating in a report on Wednesday, November 21st. One research analyst has rated the stock with a sell rating, one has issued a hold rating and six have assigned a buy rating to the company. The company has a consensus rating of 'Buy' and a consensus price target of $57.00.

7 nice charts to pick for 2019

Posted 27 Nov 2018 03:52 PM Edited 27 Nov 2018 03:52 PM

Since Oct. 1, bulls have been out of luck when it comes to the stock markets. Bears have run wild, as threats for rising rates and Chinese tariffs continue to hurt stock prices. It?s left most stock charts in shambles, as bulls dump stocks and wait on the sidelines for the dust to settle.

So far, we?ve been lacking some of the big, panicky selling days. As brutal as it is to sit through those, investors know it?s what?s needed for there to be some capitulation.

Another observation? There are still some stocks that are working in this environment, believe it or not. While some have been atypical leaders, many of the stocks that have been doing well are high-yield, consumer packaged-goods stocks. In other words, recession stocks.

Does that mean we?re heading for the dreaded recession? I don?t know. But I do know when stock charts look bullish and when they look bearish. So let?s have a look at the stock charts that are still winning.

Procter & Gamble (PG)

best stock charts for PG

best stock charts for PG

Procter & Gamble (NYSE:PG) has been on fire, but it?s not just since the market correction got under way. This name has been chugging higher since the beginning of May, when it dropped down to $70.

Even though it?s off its highs, shares are still up about $22 apiece since then, good for a 31% gain. Some investors may think of ringing the register on such a move. I can?t blame them, particularly during a time like this. But what I will say is, I would be hesitant to sell a winner like this if investors are going to hang onto other losers too.

For those that do decide to sell, there will be a bevy of buyers, particularly as PG still pays out a 3.1% dividend yield. It helps that its payout continues to rise as well. I would love a pullback to uptrend support, particularly if it comes at or near $90, another support level. Below that on the stock chart  and the 50-day should keep PG afloat.


Another big winner has been Starbucks(NASDAQ:SBUX). However, unlike PG, Starbucks hasn?t been winning for quite as long.

In mid-June, the company announced a deal with Nestle that would result in Starbucks receiving a ton of cash and simplifying its operations. This would lead to a much larger and accelerated buyback, another 20% boost to the dividend (after receiving one in November 2017) and improving margins down the stretch.

But the market didn?t care, beating the stock down to multiyear lows near $47. That?s because Starbucks also pre-announced some disappointing metrics for the quarter.

Since then, though, the stock has been on fire. SBUX stock is up more than 42% during that stretch and since trouble began in October, has done even better. From its July lows to the beginning of October, shares were up 17%. From Oct. 1 until Nov. 21, SBUX is up almost 22%.

This stock is still up big and there?s no telling if it will pull back into the mid or low $60s. But keep an eye on the stock charts to see if Starbucks can keep pushing higher.


Investors are looking for safety. Sometimes they find that in low valuations, other times in strong balance sheets. In the case of Realty Income (NYSE:O), finding a blue-chip REIT with a 4%-plus yield is suiting many investors just fine.

While Realty suffered earlier this year, shares have been storming higher on the stock chart since its February lows.

With an RSI near 70 and shares approaching their highest level in two years, I do worry about the stock topping out at this point. That?s why I?d love a dip back into the low $60s. Anything into that $58 to $60 zone would be attractive too.

If that pullback comes to fruition, investors will get a chance to buy a hot stock that?s cooled off a bit, and its yield will be better.

Even though there are fears of an economic slowdown right now, investors know that Realty?s business is well-diversified and should continue to hold up amid the slowdown. Its recent earnings beat is encouraging too. Plus, yield hunters want something that?s dependable, and it hardly gets better than the ?Monthly Dividend Company.?


Giving Realty a run for its money is Ventas(NYSE:VTR). This healthcare REIT has been incredibly consistent, is very well run and trades at a reasonable valuation. It?s no wonder VTR has been getting some love lately.

Like Realty, investors are seeking out the best stocks with consistent payouts. Ventas may not have raised its dividend in 2009, but it maintained its payout from 2008 and continued to raise its annual dividend each year after that. If VTR?s business and payout held up through the Great Recession, it will make it through any speed bumps 2019 and 2020 may have to throw at investors.

Even after its big rally, shares of VTR still yield roughly 5.1%. That?s pretty impressive for a stock that has rallied almost 20% from early October, particularly at a time where major U.S. stock indices are down double-digit percentages during the same period. Its yield is a big reason why Ventas is a buy-on-dips stock and not a sell-on-rips stock.

Like Realty, I would love a dip down into this $59 to $60 area. It will show just how strong the buy-on-dips crowd is while simultaneously working off some of that short-term overbought condition. Below uptrend support, VTR will likely find buyers between the 50-day and 100-day moving averages.


Of all the names on this list, most investors probably didn?t expect to see Tesla(NASDAQ:TSLA). But lo and behold, this name has been an absolute stud from its October lows.

We?re $100 a share off the bottom, good for a 40% rally over the last month, as TSLA now consolidates in a tight range. Earlier this week, Tesla tried to break out over the $360 level. So far though, resistance has held strong.

The question now is, what gives way first, support or resistance? Should Tesla lose channel support and the $330 level, look to see if it retests the $310 area on its stock chart. There should be plenty of support nearby if it does. Over $360 and the highs near $390 are on the table.

If Tesla maintains momentum, look to see how it trades going into earnings in 2019.


Johnson & Johnson (NYSE:JNJ): The company has great management, a bank vault of a balance sheet, a tough dividend yield of 2.5% and an excellent portfolio of products.

You can add raging stock price to that list as well.

Shares are up more than 20% from the summer lows, as JNJ has continued to grind higher and higher. The one thing I?d say about JNJ though, is that the stock has been susceptible to pullbacks.

We obviously saw this in the beginning of the year, but even more recently, shares dipped from $142 to $132 in a hurry. That said, a decline into this $140 to $144 range would be attractive. I know that?s a wide range, but depending on how conservative or how aggressive investors want to be, this wide range offers a little something for everyone.

Those who don?t want to think that much about it can simply buy on a test of the 50-day moving average.


Some call it the Tesla of China, as Nio(NYSE:NIO) went public just a few months ago. As one might expect, the stock has been highly volatile since, doubling from its $6.50 IPO price before falling 50% back to its opening-day levels.

Despite being very unlike Procter & Gamble or Realty Income, Nio has found buyers over the last two months. As shares neared $6 (on two occasions), the bulls stepped in and bought the name.

Nio shares are up about 30% so far this month and the company?s Nov. 6 third-quarter earnings report has been a catalyst for much of those gains. Production of its all-electric ES8 is coming along nicely and revenue growth is accelerating at a significant pace. If Nio is smart, it learned plenty of lessons from Tesla?s mistakes over the years. Let?s hope it doesn?t repeat some of them.

I?m not saying this one is a safe play lay-up, but only pointing out that it?s trending higher while the Nasdaq bobbles near its lows.