SPECIAL REPORT The Top 7 Stocks for 2024

The 3 Most Promising Bank Stocks to Own Now


  • These promising bank stocks have taken a hammering of late and offer considerable upside ahead for investors.
  • JPMorgan (JPM): Its diversified business model has led JPM to a stellar return over the past year.
  • Capital One (COF): Capital One’s tech-forward approach hints at expansion.
  • New York Community Bancorp (NYCB): NYCB impresses with a 5.7% dividend yield and more.
promising bank stocks - The 3 Most Promising Bank Stocks to Own Now

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While tech juggernauts celebrated a meteoric rise in the stock market this year, the narrative wasn’t quite as jubilant for financial stocks. However, amid the ebbs and flows, a few promising bank stocks defy the trends. Rising interest rates, a drooping consumer sentiment and haunting specters of regional bank collapse largely set the tone for an uneasy banking industry.

Nevertheless, while the industry grappled with a domino effect of sharp corrections, it’s pivotal to note that not all bank stocks deserved the market’s wary side-eye. With that said, let’s look at three of the top promising bank stocks to wager on offering strong upside ahead.

JPMorgan (JPM)

Chase Bank logo and storefront
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JPMorgan (NYSE:JPM) stands as a behemoth in the financial realm, with its diversified business segments, including consumer banking, investment banking, commercial banking, and notably, asset and wealth management (AWM). Such diverse anchoring protects JPM against economic tides and regulatory shifts and reinforces its trajectory for long-term growth. With a robust AWM arm, stalwart consumer lending and a crown jewel of investment banking, JPM is effectively curbing costs while channeling investments into tech enhancements, showcasing powerful adaptability.

The past year saw the bank flourish, notching a commendable 26% return. However, year-to-date gains stand at just 9.21% because of the headwinds surrounding the banking sphere. Nevertheless, JPM has effectively weathered the storm, offering an enticing forward yield of 2.7%. Additionally, its second-quarter financial scoreboard glittered with $38.6 billion in sales, marking a 26% year-over-year surge. Accentuated by both interest and non-interest gains, JPM undoubtedly shines brightly among big, promising bank stocks.

Capital One (COF)

A street view of a Capital One (COF) bank location in New York City.
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Swimming against the current of its peers, Capital One (NYSE:COF) has dazzled the market this year, delivering a handsome 9.27% year-to-date gain for its investors. While its second-quarter net income of $1.4 billion may seem like a step back from last year, it’s imperative to see the broader picture, with the stock trading at an appealing one times forward sales estimates. Moreover, Richard D. Fairbank, its CEO, emphasized the company’s forward-leaning tech infrastructure in the recent second-quarter press release, hinting at brighter avenues for growth.

On top of that, Warren Buffett continues to back the firm to come out of the current crisis relatively unscathed. His investment firm, Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) boosted its stake in Capital One by 2.5 million shares, now tipping the scale at $1.3 billion. Despite choppy waters, such as the regional banking turbulence and Moody’s cloudy forecast, Buffett’s continued faith in Capital One speaks volumes.

New York Community Bancorp (NYCB)

New York Community Bancorp logo on a smartphone screen.
Source: Piotr Swat / Shutterstock

In a year where regional banks have tempestuous waves, with three succumbing to the tide, New York Community Bancorp (NYSE:NYCB) has fared remarkably well compared to its competition. NYCB not only entices with its performance but also woos with its powerful dividend. It boasts an incredible yield of over 5.7%, with 21 consecutive years of payouts. Additionally, the bank’s strategic move of assimilating the bulk of deposits and a staggering $13 billion in loans from Signature Bank (OTCMKTS:SBNY) has catapulted its assets, marking a 35% surge to a whopping $120 billion.

The bank’s second-quarter financials have only solidified its stature in its niche. With an adjusted EPS of 47 cents, it has effortlessly overshadowed the 31 cents analyst prediction and the net interest income of $900 million, surpassing the $771 billion consensus. With a 219% year-over-year rise in total revenue, the financial horizon looks tremendously promising.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Article printed from InvestorPlace Media, https://investorplace.com/2023/08/the-3-most-promising-bank-stocks-to-own-now/.

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