The banking sector has a reputation for being a lucrative space for investors. Not only do bank stocks pay out massive dividends and yield impressive returns, but they are also great options for investors looking to build strong portfolios.
The demand for banking stocks is also at an all-time high following the banking industry’s strong showing in the year’s first half. Sentiment around the industry is largely positive because of this, and its overall performance should stay the same, barring any anomalies in the market.
Another reason banking stocks are becoming increasingly attractive is the integration of emerging technologies, such as artificial intelligence, into the banking sector. More and more banks are embracing AI into their operations, specifically customer service, and this surely bodes well for the industry, considering how hot AI is right now.
Let’s explore three of the best bank stocks in July 2024.
Bank of America (BAC)
Bank of America (NYSE:BAC) is an American multinational investment bank and financial services provider based in Charlotte, North Carolina. It’s known for its ability to stay ahead of the curve, and there is no better evidence of this than its impressive performance in the post-financial crisis era, made possible by a series of effective business decisions, such as an increase in loan portfolio rates and technology integration.
Bank of America has performed impressively this year and contributed to the banking industry’s strong showing in the first half of the year. According to its latest quarterly report, the bank generated revenue of $25.98 billion in quarter one of 2024, a second all-time high that has steadily increased over the past few years.
Its financial health has also been the strongest in recent years, as evidenced by its rapid increase in Common Equity Tier 1 (CET1) capital value. In just a year, the value has grown from $184 billion to $196 billion, making the bank one of the most valuable institutions in the banking industry.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM) is an American multinational bank notable for being the largest bank in the U.S. and the world’s largest bank by market cap. This alone makes it a no-brainer when considering the best bank stocks. JP Morgan Chase provides a plethora of financial services, from commercial and investment banking to asset management, capital raising and risk management.
A quick glance at JP Morgan and Chase’s financial performance over the past year shows why it’s an excellent option for investors interested in banking stocks. The bank’s stock has grown by 39% this year alone in the last twelve months. According to its recent quarterly report, the bank generated a revenue of $42.55 billion, thoroughly surpassing Wall Street’s expectation of $41.85 billion.
Furthermore, its sales were up 8% year-over-year. With over $3 trillion worth of assets under its management, JP Morgan Chase is one of the best bank stocks to invest in this year.
US Bancorp (USB)
US Bancorp (NYSE:USB) is an American commercial banking giant based in Minneapolis, Minnesota. Most of its revenue is generated from loans and other commercial banking products, which allows it to produce consistent profitability and efficiency metrics compared to other banks that depend on investment banking, which is generally more volatile.
This is evident from the bank’s recent quarterly report. According to the report, US Bancorp generated a net revenue of $6.7 billion and a net income of $1.5 billion.
Furthermore, its non-interest income increased by 7.7% year over year, and its non-interest expense decreased by 2.7% year over year. It also reported an earnings per share (EPS) of $0.90, beating analysts’ EPS estimate of $0.88.
Investors interested in investing in low-cap banking stocks in the second half of the year should consider US Bancorp. Its resilience, ability to generate massive revenue, and excellent history of risk management make it one of the best options available.
On the date of publication, Joel Lim 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
