Bank stocks have been hit hard in recent months. Investors are increasingly concerned about the potential consequences of new regulations, which will take effect next year. Specifically, they worry that a combination of the going-forward requirements for banks to hold more capital and an emphasis on risk management will make it harder for these companies to grow and expand their businesses.
Bank stocks offer a stable and predictable stream of dividend payments. The downside is that banks tend to only move in one direction — downward during recessions. Historically, bank stocks have experienced steep drawdowns during bear markets as investors lose faith in lenders and demand for loans falls.
If you’re willing to accept the double-digit yields of the banking sector, there are ways to mitigate risk while reaping the benefits of these investments. Understanding how bank stocks work makes it easier to find a suitable selection for your portfolio. Many different types of banks are available for investment, with each style offering its advantages and disadvantages.
Those fears aren’t without merit. However, despite these headwinds, we still think that bank stocks are worth considering for your portfolio. In this article, we’ll introduce you to three excellent bank stock ideas that should perform well over the long term—regardless of what happens in the short term—due to their strong business models and ability to adapt to changing market conditions.
Svenska Handelsbanken AB
During August, the number of short positions held on Svenska Handelsbanken AB (publ) experienced a significant decrease (OTCMKTS: SVNLY). As of August 15, there were 4,000 shares available for a short sale, representing a decline of 89.1% compared to the 36,600 shares that were traded the day before. The current short-interest ratio is 0.0 days, which can be determined using an average daily volume of 629,400 shares. In other words, the ratio has not yet reached its maximum potential.
SVNLY has garnered the attention of many research companies in the last few months. The publicly listed shares of Svenska Handelsbanken AB were given a “hold” rating in a research report released by Deutsche Bank Aktiengesellschaft on July 29. The Svenska Handelsbanken AB (publ) was the subject of a research note released on Tuesday, July 19, by Credit Suisse Group.
In this note, the company said that they were dropping their target price for the company to SEK 86. Barclays increased their price target for Svenska Handelsbanken AB (publ), which they announced in a research note that was made public on Thursday, May 12, from SEK 104 to SEK 115. The final and most significant adjustment was made here.
There have been recommendations to purchase the stock made by five analysts, recommendations to sell the inventory made by four other analysts, and advice to hold the stock made by two of those same analysts. According to Bloomberg, the consensus recommendation for Svenska Handelsbanken AB (publ) stock is to “Hold” the stock, and the consensus price objective is $105.00.
Additionally, most analysts believe that the price will reach this level. On Friday, the cost of SVNLY shares hit a new all-time high of $4.07, which was attained for the first time ever. Svenska Handelsbanken AB’s year-to-date trading ranges from $3.93 to $13.95.
The company has a PE ratio of 7.27, a PEG ratio of 0.27, and a beta value of 0.83, and its market capitalization is presently sitting at $15.83 billion. In addition, the PE ratio of the company’s PEG ratio is 0.27. The ratio of total assets to current assets is 1.89, the ratio of existing assets to total assets is also 1.89, and the ratio of debt to equity is 0.21%.
The stock price is hovering between its 50-day and 200-day simple moving averages, currently at $4.29 and $4.64, respectively, as of this writing. Svenska Handelsbanken AB offers its customers in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, China, Germany, France, and Poland a comprehensive selection of banking products and services from which they can choose the alternative that caters to their requirements in the most effective manner (publ).
Customers have access to a comprehensive selection of financial products and services, including savings, transaction, business, currency, and investment accounts; cash pool, forestry, and agriculture accounts; mortgage and committed loans; private loans; mutual funds; pension products; credit and debit cards; payment and reconciliation services; and many more.
Banco do Brasil S.A.
During August, there was a significant reduction in the number of short positions held in BANCO DO BRASIL/S (OTCMKTS: BDORY). As of August 15, there were just 15,500 shares available for a quick sale, a fall of 84.2% from the volume of 98,000 shares that were traded the day before. Since 551,400 shares are traded on average each day, the days-to-cover ratio is now at zero, which can be deduced from the fact that the ratio exists. When trading started on Friday, the price of a single share of BANCO DO BRASIL/S was $8.12 per share. The company is currently assessed to have a market capitalization of $23.27 billion, and it holds the following metrics: a beta value of 0.71, a PE/G/P ratio of 0.23, and a PE/E/G/P ratio of 5.04. Each ratio, including the debt to equity ratio, the quick ratio, and the current ratio, comes at 1.30 on its own.
The simple moving average for the past 50 days of the company’s stock price is $6.92, and the simple moving average for the past 200 days is $6.98. Over the previous twelve months, the price of BANCO DO BRASIL/S ranged from a low of $4.91 to a high of $8.69 at its most expensive. On August 10, the most recent earnings report for Banco does Brasil/S (OTCMKTS: BDORY) was distributed to members of the financial community. The financial services provider reported a quarter of $0.54 per share, which was $0.11 higher than the consensus estimate of $0.43 per share. The company reported total revenues of $13.26 billion for the period in question. BANCO DO BRASIL/S, which had a net margin of 13%, generated a return on equity of 16.44%, above the industry average. Profits of $1.95 per share are expected to be generated by Banco Do Brasil/S during the current fiscal year, as predicted by market analysts.
In addition, the company has just announced a dividend, which will be distributed on September 12. Shareholders still registered as of August 24 will be eligible to receive a $0.04 dividend payment per share. 6.91% is the yield that can be obtained from doing this. The day of the week on August 23, which is a Tuesday, is the day that will no longer contribute toward the total payout. 9.94% of Banco DO Brasil’s total stock is distributed in the form of dividends to the company’s shareholders. Banco do Brasil SA provides a wide range of banking products and services to clients based all over the world, including residents of Brazil, Brazilian enterprises, and Brazilian government agencies.
Customers in the wholesale, retail, and public sectors of the economy, as well as people with low incomes and owners of small enterprises, can take advantage of the extensive selection of products and services provided by the banking division of the organization.
Territorial Bancorp Inc.
During August, short interest in Territorial Bancorp Inc. suffered a dramatic decline (NASDAQ: TBNK). As of August 15, 17,000 shares had been borrowed, a fall of 26.7% from the 23,200 shares that had been borrowed the day before. There is only a short sale of 0.2 percent of the company’s shares on the market. The current days-to-cover ratio may be computed to be 1.5 days based on an average daily trading volume of 11,200 shares. This information can be found in the table below. Territorial Bancorp’s share price hit an all-time high of $21.34 on Friday, setting a new record for the company. The price of the stock’s simple moving average over the last 50 days is $21.53, and its simple moving average over the past 200 days is $22.73, respectively.
The company has a price-to-earnings ratio of 11.23 and a beta value of 0.49, resulting in a market value of $194.49 million for the business. The debt-to-equity ratio, the current ratio, and the quick ratio all have the same value of 0.77. This value is shared throughout all three ratios. Over the last 52 weeks, the share price of Territorial Bancorp has ranged from a low of $20.30 to a high of $26.81. On July 28, the most current quarterly earnings report was made public for Territorial Bancorp (NASDAQ: TBNK), a bank holding company. The firm that provides financial services announced earnings of $0.46 per share for the quarter, which was $0.05 better than the average expectation of $0.41 per share. The company’s revenue for the period was also $0.46 million. The actual quarterly sales for the company came in at $14.87 million, which was considerably better than the consensus prediction of $14.83 million for the quarter sales.
The return on equity for the company was calculated at 6.72 percent, and the net margin for the company was calculated at 26.14%. Analysts specializing in equity research forecast that Territorial Bancorp will generate $1.85 per share earnings during the current fiscal year. Additionally, the company has been paying out a quarterly dividend announced on August 25 and given to shareholders. On Thursday, August 11, $0.23 dividend payments per share were made to shareholders who were on record as owning the company. Considering the company’s current price, this results in a dividend yield of 4.31% and an annual payout of $0.92. As of August 10, a Wednesday, the taxes on this payout were no longer required.
Currently, Territorial Bancorp has a payout ratio of 48.42%. The total number of shares that institutional investors and hedge funds hold has changed over the past few months. The investment portfolio managed by Regency Capital Management Inc. DE saw a 1,741.3% growth in the value of its holdings in Territorial Bancorp during the first three months of the year. DE now has a total of 6,150 shares of the financial services provider’s stock, which is worth a total of $148,000 after purchasing an additional 5,816 shares during the most recent quarter. This brings the company’s total number of shares to 6,150. White Pine Capital LLC made a new investment in the stock of Territorial Bancorp during the second quarter with a total value of $227,000. American Century Companies Inc. boosted the amount of Territorial Bancorp stock owned by 34.9% during the final three months of 2018. American Century Companies Inc. now has 23,857 stocks held by the financial services provider after buying another 6,174 shares during the most recent quarter.
The current value of all these shares equals a total of $602,000. Teton Advisors Inc. boosted the proportion of Territorial Bancorp shares it owned by 4.1% during the fourth quarter of 2018. Teton Advisors Inc. now holds 25,500 of the business’s stocks, giving it a market capitalization of $644,000. This was achieved after the company made an extra purchase of 1,000 shares during the most recent quarter. Not to mention, throughout the first three months of this year, Federated Hermes Inc. boosted the number of Territorial Bancorp shares it owned by 23.8%, making this the final and most important point.
Federated Hermes Inc. currently owns 26,859 shares in the company, which have a value of $645,000 due to the purchase of 5,163 more shares in the financial services provider during the most recent fiscal quarter. Shares of the firm are now held by various institutional investors, including hedge funds, which account for 54.20 percent of the total. A sizeable number of research efforts have been focused on TBNK as a topic for investigation. Bloomberg began offering coverage of shares issued by Territorial Bancorp on Saturday, May 7. They advised investors to “hold” onto the stock rather than sell it. In a research report issued on Monday, May 2, Piper Sandler changed their rating on the shares of Territorial Bancorp from “neutral” to “underweight” in a research report.
Piper Sandler’s analysis was about the company’s stock and was made public. Specifics regarding the operation of the organization Territorial Bancorp Inc. is the holding company for Territorial Savings Bank, which provides a wide array of banking services to individuals, families, and businesses in the Hawaiian islands. Territorial Bancorp, Inc. is also the parent company of Territorial Bancorp. Customers of the bank have access to numerous account options, such as passbook and statement savings accounts, Super NOW accounts, money market accounts, certificates of deposit, and money market accounts. Certificates of deposit are also available.