10 Best Stocks for 2014: #3, Banco Santander (SAN)
Investor: Bryan Perry
YTD Return: +8%
While the S&P 500 is pretty flat year-to-date in 2014, foreign banking play Banco Santander (SAN) has managed to tack on 8% — better than the broad Financial SPDR (XLF) that holds a stake in major banking stocks like Bank of America (BAC) and Citigroup (C).
Why? Well, because Banco Santander is located in Spain and has seen a big tailwind from positive developments in Europe lately. As Bryan Perry wrote in a recent update on SAN, “it’s becoming clearer that the region is approaching escape velocity” from the recent recession.
Here’s why Bryan likes the stock:
- Banco Santander never took government bailout money — a testament to prudent management of what was a sovereign mess for most European banks.
- SAN stock carries a hugely attractive yield of 7.1%, with the next quarterly dividend payment slated for early April.
- Shares trade at just 1.14 times book value, and earnings per share are forecast to grow by 15% over the next year.
- The bank’s exposure to Latin America is in my view a tremendous long-term investment theme.