The earnings season is in full bloom, with the financial sector dominating the season thus far. The results have been mixed, as lower trading revenues have had negative impacts on a few of the big names.
Most of the major financials have trended slightly lower following their quarterly, but as overall economic conditions remain upbeat, the recent selling has created some good buying opportunities in some of the sector leaders that have recently been trading near their 52-week highs.
Higher interest rates will continue to benefit the overall sector, as higher interest income will give a big boost to banks’ bottom lines, and President Trump’s decision to ease restrictions that were put on the sector during the financial crisis should also result in higher earnings down the road.
The big news for the sector was the recent round of stress tests that the Federal Reserve has been using since the financial crisis to make sure that the big banks are well positioned to handle another economic crisis, and to ensure that their capital programs are not putting too much strain on the companies.
All of the banks passed the stress test, indicating that the sector remains healthy, and will allow for additional dividend increases and more share buybacks… both of which will result in better shareholder value.
Let’s take a look at a handful of banks that are still attractive buys after recent earnings reports.