The eight dividend-paying banking investments to purchase include seven stocks with market values of more than $10 billion and one financial services exchange-traded fund. Even though the dividend-paying regional banks are smaller than the huge money center banks that operate internationally and were featured in one of my recent columns, they should benefit from the same trends.
Providence, Rhode Island-based Citizens Financial Group (NYSE:CFG) received a $55 price target from BofA, which assumed below-peer multiples given the bank’s above average rate sensitivity and lack of options to offset higher credit costs. Fifth Third Bank (NASDAQ:FITB), of Cincinnati, Ohio, earned a $46 price objective from BofA. San Francisco-based First Republic Bank (NYSE: FRC) received a $240 price objective from BofA. Columbus, Ohio-based Huntington Bancshares (NASDAQ: HBAN) gained a $19 price target from BofA, with higher-than-peer average multiples due to its strong outlook for returns. Buffalo, New York-based M&T Bank (NYSE: MTB) received a $180 price objective from BofA, featuring multiples above its peer banks due to superior historical credit performance. Pittsburgh-based PNC Financial Group (NYSE: PNC) earned a $215 price target from BofA. BofA set a $74 price target for Truist Financial Group Inc. (NYSE: TFC), a regional bank in Charlotte, North Carolina. As a proxy of the banking industry, the Financial Select Sector SPDR Fund (XLF) easily has outpaced the SPDR S&P 500 ETF (SPY) in 2021, Woods noted.
Source: Dividend Investor
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