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The 10 Best Bank Stocks To Invest In Right Now!

Sarah Foley - November 16, 2020

Best Bank Stocks

The banking industry is an essential part of our economy. Because of this, bank stocks can make great investments. While they can fluctuate 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.

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.

Like many other stocks in the financial sector, JPMorgan Chase dropped in value this year as a result of the coronavirus pandemic. While its stock value has risen since then, it still hasn’t returned to pre-pandemic levels.

However, this could actually present an opportunity for investors. Of all of the big bank stocks, JPMorgan Chase is one of the most well-managed and financially sound. They’ve also posted strong earnings in both the second and third quarters of 2020.

As with other stocks in the financial industry, JPM could potentially fluctuate over the next year as these turbulent times continue. However, their strong finances mean they may be able to weather this storm more effectively than other big banks.

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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.

Citi bikes in New York

Citigroup (NYSE:C)

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.

The pandemic hit Citigroup hard, and it may take some time before this stock fully recovers. This year to date, their stock has dropped by over 30 percent. It shows no signs of returning to its 2019 levels anytime soon. They still are paying a dividend of $0.51 per share.

Citigroup exceeded expectations with their third quarter earnings, surprising investors. However, they have recently been sanctioned by the Federal Reserve due to internal risk management issues.

These are all potential causes for concern, and investors should tread carefully here. However, this stock is currently trading at an extremely low price. This means it could generate strong returns when the stock market eventually rebounds, especially if they address their compliance issues before then.

Citigroup has struggled this year, and it may take time for things to turn around. However, their position as one of the ‘Big Four’ banks in America means they will likely see a recovery at some point.

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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. They are well-positioned for a buy and hold strategy right now, despite the COVID-19 crisis.

Although Bank of America has lost revenue this year, they have focused on keeping a strong business strategy. They have used their investment banking operations to offset some of the losses that they’ve incurred on the retail banking side. They’re also very responsible with their lending and have committed to keeping their financial risks low.

Bank of America stock is very well-priced right now in relation to their earnings. They’ve been able to continue paying their dividend comfortably, despite the financial crisis of this year. This bank stock is one to keep your eye on, especially as the entire sector starts to recover.

Wells Fargo ATM

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 throughout the U.S. and abroad. They specialize in personal finance products, but

This stock has had a very tough year, so it’s not for the faint of heart. Their stock dropped when the market crashed, but it hasn’t been able to make much growth headway since then.

The financial sector at large has struggled this year, but Wells Fargo has underperformed its peers. They are almost entirely a consumer-facing operation, without much in the way of investment services. Retail banks have been hit much harder by the recession, and Wells Fargo is no exception.

Wells Fargo has also been at the center of many high profile scandals in the past few years. They’ve had to take time and effort to rehabilitate their public image.

However, Wells Fargo stock is so low right now that it may be the time to buy. As one of the biggest banks in the country, they’ll still be a key part of the market regardless of how the economy fluctuates. They’ve also still managed to stay profitable. This company could end up coming out on top in the long run.

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 five percent. They are also still affordably priced for the financial sector. Although they have bounced back from the pandemic, they haven’t quite returned to their 2019 value.

Although TD Bank’s earnings are down this year, they have still managed to post strong numbers in the wealth management sector. They’ve also managed their finances responsibly and have avoided taking unnecessary risks during this time.

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. This combined with its long history as a reputable Canadian bank has made it a reliable pick even as the market fluctuates.

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. Since the crash in March, their stock value has grown steadily.

Analysts see plenty of room for growth in Citizen’s finances. Key indicators like their price to book value and their return on equity both look strong.

Their earnings report for the third quarter was strong as well. While net interest income stayed level, their revenue beat earnings expectations dramatically. There’s still plenty of room for this stock to grow, and now is a good time to buy.

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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 earlier this year, which generated a significant amount of cash. This has helped keep their finances stable through tough times this year.

Although this bank has seen a drop in profits this year, their net income has remained solid. Their price to book ratio is also very reasonable. They have had to close some branches as a way of managing their expenses.

Analysts like Warren Buffet have cited this stock as one that has plenty of potential for the future. Although it may fluctuate with the market over the next several months, this company is set up for a strong return in years to come.

Best Bank Stocks That Pay Dividends

US Bank Building

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.

Despite the market crash earlier this year, U. S Bancorp has managed to stay afloat. They are known for having a strong efficiency ratio and being very fiscally responsible. This has helped them weather the challenges of this year. An efficiency ratio indicates how much money the bank has to spend to generate revenue.

U.S Bancorp currently pays a dividend of $1.68. They are committed to keeping their dividend payout steady regardless of the challenges that this year has brought.

U. S. Bancorp stock is currently trading at more than 30 percent of where it was last year. Although the stock has been hit hard by the pandemic, they’ve continued to stay profitable, with strong earnings per share.

Since U. S. Bancorp has posted stable finances, it’s only a matter of time before their stock value catches up. Now is a great time to make a purchase, while their stock price is low.

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.

While it hasn’t quite reached pre-pandemic levels, Goldman Sachs stock has rebounded since the crashes in March. Investment banking tends to do better during recessions than retail banking, which is why Goldman Sachs has experienced continued growth during this challenging time.

Goldman Sachs has a very strong dividend yield of 2.29 percent, with a cash payout of $1.25 per quarter. The company also exceeded expectations in the third quarter, defying analysts’ expectations.

Their earnings per share rates are currently more than $4 higher than anticipated. This company has also dramatically increased their revenue year over year by almost 30 percent this quarter.

Are Bank Stocks Good Investments?

The financial crisis of this year has hit the banking industry hard. You may be wondering if bank stocks are a good investment given the challenges of this 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.

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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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Sarah Foley is a freelance content writer based in Chicago. She covers finance as well as real estate, technology, pop culture, and more.

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