In this article, we'll discuss the 11 best diversified bank stocks to invest in. If you would like to skip the detailed analysis of these stocks, please go directly to the following link. 5 Best Decentralized Bank Stocks for Investment.
The coming months could be tough for bank stocks as the U.S. central bank considers lower interest rates in light of cooling inflation trends. Interest rates had risen to record highs over the past two years as prices rose due to post-pandemic demand pressure.according to Estimate Global inflation is expected to fall to 5.2% in 2024 from a high of 8.7% in 2022, according to the International Monetary Fund. The fund predicts that the world economy is likely to grow by 3% this year.
Forecasts by the Federal Reserve show The U.S. federal funds rate is expected to remain high at more than 550 basis points in the first half of 2024, but could fall to 450-500 basis points in the second half of this year. Tight policies by central banks around the world limit the supply of money.Research company Deloitte Claim This background will create conditions for divergent and sporadic economic growth, especially in the banking and financial sector.
In recent years, JPMorgan Chase (NYSE:J.P.M.), Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C) recorded a significant increase in net interest income as a result of higher interest rates. In 2022, U.S. and Canadian banks saw an 18% year-over-year increase in net interest income. European banks reported an 11% increase in net interest income for the year compared to the previous year. Even if interest rates fall later this year, high deposit costs are likely to remain a major concern in the banking world.
In this overall environment, investors who include banking stocks in their portfolios will benefit well from banking companies that are diversifying their income sources. In mid-January, Citigroup (NYSE:C) CEO Jane Fraser emphasized this in a press conference. Fourth quarter financial results briefing She shares some of the steps her company has taken to diversify its business and keep up with the pace of change in the financial world, realizing synergies between its five businesses to achieve medium-term profitability. He emphasized that this is one of the key driving forces for the target.
“We increased tangible book value per share by 6% to $86.19 and returned $6 billion of capital to shareholders in the form of common dividends and share repurchases. As we look back on this year, we also recognize that we have been a source of strength for our systems and customers during a period of banking and geopolitical instability. We would like to note that we are also extremely proud of how our employees around the world have performed during this period of difficult times. The environment will likely be similar to 2023. Global growth is expected to slow, and the U.S. is well-positioned to withstand a real recession if it materializes. With our balance sheet, strong liquidity, and careful risk management, we are well positioned to support our clients in any environment they encounter.Furthermore, we are well positioned to support our clients in any environment they encounter.Furthermore, we are well positioned to support our clients no matter what environment they encounter. We believe that this environment has contributed to our strength. 2024 will be a turning point that will allow us to fully focus on the performance and transformation of our five businesses. We are confident that we will reap the benefits of our efforts to date through business momentum. Supported by our investments in key products, we expect to achieve post-sale returns of 4% to 5% over the medium term. We believe we can continue to grow. Overall, we continue to make the necessary investments in information, while continuing to leverage our evolving capital and macro We remain confident in our ability to adapt to the environment.”
our methodology
Diversified companies with banking operations at the core of their portfolios were selected and ranked according to hedge fund sentiment. We also discuss analyst ratings for each stock to provide readers with context for their investment choices. Hedge fund sentiment for each stock was calculated using data from approximately 900 hedge funds tracked by Insider Monkey in Q4 2023. The consensus top 10 stocks selected by hedge funds have historically outperformed the S&P 500 index by more than 140 percentage points. 10 years (Please see here for the detail). That's why we pay close attention to this often ignored metric.
City skyline with multiple local banks in the foreground.
Best diversified bank stocks to invest in
11. Mizuho Financial Group, Inc. (NYSE:manufacturing industry)
Number of hedge fund holders: 7 people
Mizuho Financial Group, Inc. (NYSE:MFG) We conduct business related to financial services such as banking, trusts, and securities. Seven hedge funds in Insider Monkey's database held $13 million worth of Mizuho Financial Group (NYSE:MFG) stock at the end of Q4 2023, and nine held $3.4 million worth of stock in the previous quarter. It was equivalent to US dollars.
Mizuho Financial Group, Inc. (NYSE:MFG), as well as JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Citigroup Inc. (NYSE:C). is one of the most diversified companies. Bank stocks to invest in.
10. HSBC Holdings plc (NYSE:HSBC)
Number of hedge fund holders: 15 people
HSBC Holdings plc (NYSE:HSBC) provides banking and financial services worldwide. On March 1, investment advisory firm RBC Capital maintained a Sector Perform rating on HSBC Holdings plc (NYSE:HSBC) stock and lowered its price target from GBP7.50 to GBP7.25.
One of the hedge funds tracked by Chicago-based investment firm Insider Monkey. Citadel Investment Group is the largest shareholder of HSBC Holdings plc (NYSE:HSBC) with 783.9 billion shares worth over $31 million.
9. Barclays PLC (NYSE:B.C.S.)
Number of hedge fund holders: 17 people
Barclays PLC (NYSE:BCS) provides a range of financial services in the UK, Europe, the Americas, Africa, the Middle East and Asia. On March 14th, investment advisory firm JP Morgan maintained an “overweight” rating on Barclays PLC (NYSE:BCS) stock and raised its price target from £180 to £200.
One of the hedge funds tracked by London-based investment firm Insider Monkey. Marshall Weis LLP is the largest shareholder in Barclays PLC (NYSE:BCS) with 6.8 million shares worth over $54 million.
8. Discover Financial Services (NYSE:DFS)
Number of hedge fund holders: 43 people
Discover Financial Services (NYSE:DFS) provides digital banking products and related services. On February 23, investment advisor Piper Sandler maintained an Overweight rating on shares of Discover Financial Services (NYSE:DFS) and raised their price target from $127 to $145.
43 hedge funds in Insider Monkey's database held $1.4 billion worth of shares in Discover Financial Services (NYSE:DFS) at the end of Q4 2023, and 46 held shares in the previous quarter. It was worth $1.2 billion.
7. Capital One Financial Corporation (NYSE:C.O.F.)
Number of hedge fund holders: 51 people
Capital One Financial Corporation (NYSE:COF) operates as a financial services holding company for several U.S. financial institutions. On February 29, investment advisor UBS maintained its rating on Capital One Financial Corporation (NYSE:COF) stock at “neutral” and raised its price target from $132 to $140.
Some of the hedge funds tracked by Camas, Texas-based investment firm Insider Monkey Fisher Asset Management is the largest shareholder in Capital One Financial Corporation (NYSE:COF) with 9.5 million shares worth over $1.2 billion.
In our Q4 2023 investor letter, we state: sound shore managementCapital One Financial Corporation (NYSE:COF), an asset management company, was one of several stocks we picked. here The fund says:
“Long-term holding Capital One Financial Corporation (NYSE:COF) was another company that performed well during the quarter. The company is approximately 80% FDIC insured and significantly outperformed the industry average. We are the only major bank to be 100% cloud-based, allowing us to improve our underwriting operations and respond quickly to changing environments. While reducing costs and fraud costs, it also helps free up cash flow to reinvest in marketing to grow the product (Venture X Card) and build the brand. As seen in the banking sector in March Times of stress like these remind us of Capital One's underwriting acumen and high quality deposits. We knew our seasoned management team had successfully navigated the cycle thus far; In the aftermath, we have further strengthened our position. Capital One is already reporting a slowdown in delinquency growth, as credit card delinquencies have now risen to more normal levels. Some peers see previous underwriting failures starting to surface in 2023. Currently trading at 9x 2024 consensus earnings and around book value, we remain invested. He is enthusiastic.”
6. Morgan Stanley (NYSE:M.S.)
Number of hedge fund holders: 56
Morgan Stanley (NYSE:MS) A financial holding company that provides a variety of financial products and services to businesses, governments, financial institutions, and individuals. On January 20, investment advisor Oppenheimer maintained an Outperform rating on Morgan Stanley (NYSE:MS) stock and raised its price target from $106 to $109.
Some of the hedge funds tracked by Texas-based investment firm Insider Monkey Fisher Asset Management is Morgan Stanley's (NYSE:MS) largest shareholder with 20 million shares worth more than $1.8 billion.
In addition to JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) is one of the most It is one of the best decentralized banking stocks. Invest.
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Disclosure. none. 11 best diversified bank stocks to invest in Originally published on Insider Monkey.
