For those of you considering taking a position in a large US bank here are the yields, payout ratios, current PE and forward PE of some of America’s biggest banks.
C
Yield: 4%
Payout Ratio:48%
PE: 13
Projected 2007 PE: 12
BAC
Yield: 4.47%
Payout Ratio:46%
PE: 10.65
Projected 2007 PE:10.38
JPM
Yield: 3%
Payout Ratio:31.5%
PE: 11.7
Projected 2007 PE: 11.3
USB
Yield: 4.7%
Payout Ratio:55%
PE: 13.1
Projected 2007 PE: 12.76
WB
Yield: 4.14%
Payout Ratio:46%
PE: 11.5
Projected 2007 PE: 10.9
WFC
Yield: 3.1%
Payout Ratio:43%
PE: 14.1
Projected 2007 PE: 13.3
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8 comments:
Based on a quick eye-ball scan, I noticed that the P/E for most US banks are lower than their Canadian counterparts and US banks have much larger international presence. They may not be bad plays.
Any thoughts on doing the large international banks like HSBC?
Thanks for the info!
It's actually pretty timely - I just set up my US brokerage account within my 401k to start buying stocks and funds outside of the generic funds in our work plan. I have some US $'s to spend on a few good US companies and ETFs. This list will help!
I have come close to pulling the trigger on BAC a few times within the past few months.
I really like the valuation here, and they will be raising their dividend very soon. I may start looking at it again. I don't want to get too heavy into financials though as they already make up 33% of my portfolio.
Investor99,
For what it's worth I was watching Market Call yesterday and BAC was also a top pick of John O'Connell, portfolio manager, The Harbour Group, RBC Dominion Securities.
BTW
Belated congratulations on the new addition.
All the best
Q
I too have been looking at adding some BAC. Down to less than $49 now. The P/E is lower than most of its peers. Almost down to a 52 week low. They do have a lot of debt though.
Moneygardener, do you think they will raise their dividend even with it being at almost 4.5%?
I'm a little wary of big US banks until the whole housing/sub-prime mess sorts itself out down there. Its tough to tell how involved the various big banks are. I'm expecting some will take big write downs, and will consequently become bargains.
I would avoid owning stock in major US banks.
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