Cheap Stocks to Buy Now – Huntington Bank (HBAN)
Huntington Bancshares (HBAN) has largely tracked the rest of the market in the past year, up 12% vs. 14% for the S&P 500 in that period. However, as a $7.9 billion bank with operations mainly in the Midwest, this cyclical financial play could be a great way to gain exposure to the long-term recovery taking shape across America.
HBAN operates from Michigan to West Virginia — areas that haven’t been especially booming in the last few years — but has smart plans to squeeze more growth from its home region. For starters, Huntington operates wealth management businesses now in Florida — a shrewd move, considering many Midwest retirees relocate to Florida (with their cash) as they age.
The company also has aggressively increased its auto loan footprint to make up for a flat-lining housing market across much of the Midwest. In fact, its Q2 earnings beat expectations with 9% year-over-year growth in large part because of a massive 39% jump in auto loans.
Huntington currently offers a modest 5-cent dividend per quarter, good for a 2.1% yield. However, as earnings mend and the Federal Reserve allows for increases, it’s not unrealistic to expect Huntington’s payouts to double over the next few years.
This is a cyclical play, make no mistake — and if the economy softens up and the economy heads south, so will HBAN. But considering the momentum of the U.S. recovery, this regional bank is worth a buy under $10 per share.