The banking industry is an essential part of our economy. Because of this, bank stocks can make great investments.
While they can fluctuate in the short term depending on the broader performance of the market, they have the potential for very strong returns in the long term.
We’ve rounded up some of the best bank stocks on the market right now.Wondering where to buy the stocks listed in this article? Check out Webull! Webull is an excellent trading app for beginnings and experienced investors alike. They have zero fee trading, and you'll even get a free stock (valued up to $1600) just for signing up!
What Is The Best Stock Bank Stock To Buy?
JPMorgan Chase (NYSE:JPM)
JPMorgan Chase is one of the largest and most influential banks in the world.
Based in New York City, they have been a key part of the US economy since they were incorporated in 2000. They were founded as a merger of other long-established US banks.
JPMorgan Chase offers a huge range of financial services, including retail and commercial banking, wealth management and investment, treasury services, and more.
They have a global presence with operations around the world.
After struggling in 2020, JPMorgan Chase stock has slowly but steadily been on the rise in 2021.
Despite this steady growth, their price-to-earnings ratio is still around 10, which is relatively low. This means that the stock is considered cheap in relation to the company’s most recent earnings report.
This stock also pays a solid dividend yield of 2.32 percent, which can provide an additional source of income for long-term investors.
JPMorgan Chase’s balance sheet is also very appealing. Even during the hardest days of the pandemic, they were able to post relatively strong earnings numbers.
Their 2021 Q2 earnings report was just as promising, as profits are up more than 150 percent from a year ago.
JPMorgan Chase is a stalwart in the banking industry and appears to be a solid long-term stock pick.
Best Bank Stocks To Buy And Hold
Bank stocks have been hit hard by the pandemic, and these challenging economic times are not over yet.
However, these stocks can make a good long-term investment.
When the economy eventually rebounds, bank stocks are likely to rebound with it.
Here are some of the best bank stocks to buy and hold.
Citigroup is another one of the largest banks in America.
Based in New York City, they were founded when Citicorp and Travelers Group merged in 1998.
They offer retail banking through Citibank, as well as investment banking, securities, capital markets organization, and more.
Like many other bank stocks, Citigroup’s share price tanked in March 2020 but has made a solid recovery since then.
This is another stock that has a price-to-earnings ratio of under 10 and overall appears to be a fairly cheap buy.
They’ve also continued to pay a dividend yield of 3 percent.
Citigroup’s most recent earnings report was a very positive one. They managed to beat consensus estimates for both earnings and revenue.
When compared to last year, revenue is down but net income is up for Citigroup. This makes sense given the changes in market activity and interest rates.
Overall, Citigroup appears to be on an upward trajectory. Investing in this stock could be a way for investors to pick up strong returns as the economy rebounds.
Bank of America (NYSE:BAC)
Bank of America is another one of the ‘Big Four’ U. S. banks.
Based in North Carolina, they have a number of regional hubs throughout the United States.
Bank of America managed to stay afloat during the COVID-19 crisis by focusing on investment banking, which compensated for retail banking losses.
Since then, things have improved for BoA stock. Their share price is up over 57 percent from July 2020, but their price-to-earnings ratio has remained low.
They’ve also been able to keep up their dividend payments.
In the short term, this stock actually dropped slightly after the company released their second-quarter earnings report.
This is mainly because of a drop in revenue, which the company attributed to lowering interest rates.
While this is a concern in the short term, Bank of America remains a strong pick to buy and hold. This actually could be a good time to buy the dip and pick this stock up at an affordable price.
We’re only just starting to recover from the COVID-19 crisis, and this stock is one that can really benefit from this economic rebound.
Wells Fargo (NYSE:WFC)
Wells Fargo is another one of the ‘Big Four’ U. S. banks.
They are based in San Francisco and have operations around the world.
Wells Fargo struggled in 2020, especially when compared to its competitors.
However, they have made a very impressive recovery. Their share price has increased by over 75 percent year-over-year.
They also managed to remain profitable despite the global economic challenges.
Their Q2 earnings report was a very positive one. They managed to beat analysts’ expectations for earnings and revenue and generate a solid profit.
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Only time will tell if Wells Fargo can keep up this momentum, but so far, the future looks bright.
Best Canadian Bank Stocks
TD Bank (NYSE:TD)
TD Bank is a large Canadian bank based in Toronto.
They have bank branches in Canada and the United States, and have global operations.
They offer consumer accounts and credit in addition to some investment services.
Something that makes TD Bank particularly appealing is its high dividend, which is currently over 3.5 percent.
They are also still affordably priced for the financial sector, with a low price-to-earnings ratio.
TD Bank managed their finances very carefully and avoided unnecessary risks in 2020, which helped them come out safely on the other side of the COVID-19 crisis.
Their CEO also indicated earlier this year that they were interested in making an acquisition in the US, which is a good indication that they are financially stable.
Their stock price has been slowly increasing over the past several months. In fact, their shares hit an all-time high in June 2021, but have dipped off slightly since then.
This is a top pick for anyone interested in investing in Canadian bank stocks.
Royal Bank of Canada (NYSE:RY)
The Royal Bank of Canada is the largest Canadian bank and has a large global presence.
They have recovered from the pandemic in good financial shape, posting strong earnings.
Like many other large global banks, the Royal Bank of Canada balances retail services with investing and capital markets services.
This has helped them keep their income steady through the challenges that the market has presented this year.
Royal Bank of Canada offers a dividend with a strong quarterly return. Right now, their dividend yield is a whopping 3.5 percent.
This combined with its long history as a reputable Canadian bank has made it a reliable pick even as the market fluctuates.
Right now, their share price is up over 40 percent year-over-year.
Best Regional Bank Stocks
Citizens Financial Group (NYSE:CFG)
Like many regional banks, Citizens Financial Group has struggled this year.
However, their potential for growth is so strong that they may be worth investing in now.
Citizens is a mid-sized regional bank based in Providence, Rhode Island.
They have branches throughout the Northeast and Midwest.
They’ve recovered very well from the market crash of last year, and their shares are actually trading higher now than they were in 2019.
On top of that, they have a dividend yield of over 3.5 percent.
After hitting a high point in May 2021, this stock has dropped in price slightly. This gives investors an opportunity to pick it up at a more affordable price.
PNC Financial Services Group (NYSE:PNC)
PNC Financial Services group is another regional bank with plenty of potential.
This company is based in Pittsburgh, Pennsylvania and has bank branches in 21 states and the District of Columbia.
PNC sold its stake in BlackRock last year, which generated a significant amount of cash.
This has helped keep their finances stable through the tough times of the COVID-19 crisis.
After losing profits and having to close branches last year, PNC stock has rebounded in a big way.
Their share price hit an all-time high in May, but their P/E ratio is still low, indicating that they have more room to grow.
The company also recently announced an upcoming dividend increase, indicating that their balance sheet is strong and they’re ready to make payouts to investors.Looking for more stock picks? Get a new trade every week for free with Trade Ideas. Trade Ideas sends you a new pick every single week along with the reasoning on why it could be ready to break out. Sign up for free right here.
Best Bank Stocks That Pay Dividends
U. S. Bancorp (NYSE:USB)
U. S. Bancorp is based in Minnesota and is one of the largest retail U. S. banks.
While they do offer some investment banking services, U. S. Bancorp is primarily a consumer-facing operation that sells personal finance products.
They currently have thousands of branches in 25 states.
As with many other bank stocks, U. S. Bancorp has had a stellar start to 2021 after the struggles of last year.
Their share price has rebounded and they’ve managed to keep their dividend up at 2.87 percent.
They also recently released their Q2 earnings report.
This earnings report was incredibly exciting for the bank, as they managed to beat Wall Street estimates.
This is the third time in the last year that this company has exceeded expectations with their earnings report.
U. S. Bancorp’s consistently strong performance makes them a very strong pick in the banking industry.
Goldman Sachs (NYSE:GS)
Goldman Sachs is one of the largest investment banking companies in the United States.
They do not have any retail banking operations, unlike many of the other companies on this list.
Many investors actually look at Goldman Sachs’ trading activity to inspire their own investment decisions.
Their share price has rebounded by over 70 percent in the last year, but their P/E ratio is less than 7.
Their most recent earnings report showed growth in both net revenue and earnings.
In particular, their asset management and investment banking segments reported strong numbers.
They’ve also recently announced a significant increase to their dividend.
Now is a great time for investors to pick up this banking juggernaut while their share price is still relatively cheap.
Are Bank Stocks Good Investments?
The financial crisis of 2020 has hit the banking industry hard.
You may be wondering if bank stocks are a good investment given the challenges of the past year.
Bank stocks can be a very strong investment, especially in the long term.
This is because banks are a key part of our economy.
Large banks especially are unlikely to fully tank, although they are subject to the fluctuations of the market.
Bank stocks often reflect market volatility in their performance.
Although this makes them highly susceptible to a recession, it also means they do well when the broader economy does well.
Investors can leverage the cyclical nature of these stocks for a strong return.
Not all bank stocks are created equal. When considering an investment in this sector, look at how the company manages its finances.
Banks that can weather tough times such as the COVID-19 pandemic have the stability to perform well when the economy rebounds.
Bank Stocks: Final Thoughts
Bank stocks have struggled this year – there’s no doubt about it.
As the market changes, banks have the opportunity to rebound.
They are a key part of our economy, and can provide strong future returns as the market returns to a more stable position.
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