Back to top

Image: Bigstock

Is it Advisable to Add U.S. Bancorp (USB) to Your Portfolio?

Read MoreHide Full Article

Favorable economic data, the Fed’s recent rate hikes and tax-reform bill benefits have boosted investors’ confidence in banking stocks. Therefore, some of these stocks can be profitable additions to your portfolio, backed by robust fundamentals and encouraging long-term prospects.

Thus, this is the right time to add a few banking stocks to your portfolio. Today, we bring one such stock — U.S. Bancorp (USB - Free Report) — that continues to depict strong fundamentals and improving prospects.

Further, this Zacks Rank #2 (Buy) stock has appreciated more than 2.5% year to date compared with the 6.1% decline registered by the industry.



Why U.S. Bancorp is a Golden Egg

Revenue Strength: U.S. Bancorp’s net total revenues witnessed a compounded annual growth rate (“CAGR”) of 3%, over the last five years (2013-2017). The sturdy top-line improvement has been backed by strong loan and deposit growth. In addition, rising rates are likely to boost the net interest income and margin further.

Additionally, the company’s projected sales growth of 2.7% for 2018 and 3.9% for 2019 ensure continuation of the upward revenue trend.

Earnings per Share Growth: U.S. Bancorp witnessed 4.6% growth in earnings per share over the last three to five years. Management projects long-term earnings growth rate of 7.5%. Notably, earnings are estimated to grow at a rate of 19.9% for 2018 and 6.7% for 2019.

Superior ROE: U.S. Bancorp’s Return on Equity (ROE) ratio is 15.14% compared with the industry average of 12.23%. This indicates that the company reinvests more efficiently compared to the industry.

Strong Leverage: The debt-to-equity ratio for U.S. Bancorp is 0.91 compared with the industry average of 0.94. This indicates greater financial stability for the company and lesser risk for shareholders.

Strategic Moves: U.S. Bancorp has made a number of strategic bank acquisitions in the past years, which have opened new markets for the bank and fortified the existing ones as well. These acquisitions, combined with ongoing investments in innovative product enhancements, services and people have strengthened the company’s balance sheet and fee-based businesses besides increasing its market share.

Other Stocks to Consider

Greenhill & Co., Inc. has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #1 (Strong Buy) Ranked stock has rallied more than 26% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

JPMorgan (JPM - Free Report) has been witnessing upward estimate revisions for the past 60 days. Also, the company’s shares have gained nearly 2.9%, year to date. It carries a Zacks Rank of 2, at present.

Great Southern Bancorp, Inc. (GSBC - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped around 6.4% year to date. It currently carries a Zacks Rank #2.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


JPMorgan Chase & Co. (JPM) - free report >>

U.S. Bancorp (USB) - free report >>

Great Southern Bancorp, Inc. (GSBC) - free report >>

Published in