2 Bank Stock Picks from Atlantic Equities
By Philip van Doorn - 08/23/12 - 8:23 AM EDTTheStreet) -- Atlantic Equities analyst Richard State on Thursday said that PNC Financial Services Group
PNCPNC's shares closed at $62.16 Wednesday, returning 10% year-to-date, following a 3% decline during 2011. The shares trade for nine times the consensus 2013 earnings estimate of $6.82 a share, among analyst polled by Thomson Reuters. Based on a 40-cent quarterly payout, PNC's shares have a dividend yield of 2.57%. PNC's operating returns on average equity (ROE) over the past five quarters have ranged between 5.44% and 10.62%, according to Thomson Reuters Bank Insight. Staite estimates that in 2013, the company's return on tangible equity will be 14.6%, and that excluding the company's 22% stake in BlackRock
Wells FargoWells Fargo's shares closed at $34.18 Wednesday, returning 27% year-to-date, following a 10% decline during 2011. The shares trade for nine times the consensus 2013 EPS estimate of $3.67. Based on a 22-cent quarterly payout, the shares have a dividend yield of 2.57%. The company's operating returns on average equity (ROE) over the past five quarters have ranged between 11.51% and 12.37%. Staite estimates that in 2013, Wells Fargo will achieve a return on tangible equity of 16.7% and earn $3.79 a share, with its dividend yield increasing to 3.4%. The analyst rates Wells Fargo "Overweight," with a $40 price target, and said the shares were "attractively valued on a P/TB of 1.6x," and that the price-to-tangible-book ratio could move up to 1.8. Staite said that Wells Fargo's return on tangible equity "is currently running at 16% and should remain at this level with potentially weaker mortgages revenues in 2013 being offset by cost savings," but that "medium to longer term we think 18% is attainable." Please see TheStreet's earnings coverage for details on Wells Fargo's second-quarter performance. Interested in more on Wells Fargo? See TheStreet Ratings' report card for this stock.
U.S. BancorpShares of U.S. Bancorp closed at $32.90 Wednesday, returning 24% year-to-date, following a 2% return during 2011. The shares trade for 11 times the consensus 2013 EPS estimate of $3.04. Based on a quarterly payout of 19.5 cents, the shares have a dividend yield of 2.37%. USB's operating returns on average equity (ROE) over the past five quarters have ranged between 14.65% and 16.44%. Staite estimates that in 2013, the company's return on tangible will be 22.5%, with EPS of $3.02, and a dividend yield increasing to 2.5%.
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