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Zacks Insights: This Sector is Dominating the Top-Ranks
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With the Fed widely expected to cut policy rates this year, interest rates are broadly forecast to fall, and Financial stocks are set up to benefit considerably from this shifting dynamic. Banks in particular, which hold large securities portfolios, made up primarily of fixed income would benefit significantly as those assets should rally in response to a decline in interest rates.
In addition to banks, REITs (Real Estate Investment Trusts) should enjoy upward trending asset prices too, as real estate also benefits from the relationship between interest rates and securities, which are inversely correlated.
Also worth noting is that the Financial sector is hogging the Zacks rank with by far the most stocks on the list. Financials make up 49 names on the list, considerably more than the second most populous, Computer sector with 28 stocks.
Here, I will share three stocks which enjoy top Zacks ranks, pay generous dividend yields and appear to be some of the most attractive of the bunch.
Financial Sector Outperformance
One sign that financial stocks may experience a continued strong period is that the sector has shown relative strength compared to the market. In Q4 Financials have edged out the broad market in terms of performance by a fairly significant margin.
Image Source: TradingView
Associated BancCorp
Associated BancCorp (ASB - Free Report) is a bank holding company providing a range of financial services. Headquartered in Green Bay, Wisconsin, it operates through its banking subsidiary, Associated Bank, serving customers in the Midwest. ASB has $42 billion in assets.
The bank has more than 200 locations, serving more than 100 communities and offers various banking products and services, including commercial banking, retail banking, and wealth management. With a focus on community-oriented banking, Associated BancCorp plays a vital role in supporting individuals, businesses, and communities in its operational areas.
ASB has enjoyed unanimous revisions higher to its earnings estimates, giving it a Zacks Rank #1 (Strong Buy) rating. Earnings estimates have increased across future timeframes.
ASB is generous in returning cash to shareholders as is demonstrated by its large dividend yield and commitment to raising the payout. The current yield is 4.2%, and it has been raised by an average of 5.3% annually over the last five years.
Image Source: Zacks Investment Research
Associated BancCorp is also trading at a historical discount. Today, it trades at a one year forward earnings multiple of 9.3x, just below the industry average and well below it 10-year median of 14.1x.
Image Source: Zacks Investment Research
TANGER INC
TANGER INC (SKT - Free Report) is a real estate investment trust (REIT) that specializes in the ownership, management, and development of outlet shopping centers. The company owns and operates 38 shopping centers making up 14 million square feet and 3,000 retail stores.
I am personally a huge fan of TANGER INC shopping centers, which offer discounted luxury products and comfortable environments. Just a couple of years ago I bought a beautiful West Elm couch at a huge discount at one of their malls.
TANGER INC has experienced some nice earnings estimate revisions over the last two months, giving it a Zacks Rank #1 (Strong Buy) rating. The company also pays a 3.8% dividend, allowing investors to collect some cash while they own the shares.
SKT stock has been getting a lot of love since last summer, and the stock has been continuously trading higher on momentum breakout patterns. In the chart below you can see the stock has been consolidating and breaking out repeatedly in the last six months.
Right now, the stock is forming a very convincing descending bull flag. If SKT can breakout and close above the $27.60 level, it should make new multi-year highs. Alternatively, if it can’t hold above $2y, investors may want to wait for another opportunity.
Image Source: TradingView
Fulton Financial
Fulton Financial (FULT - Free Report) is also a regional bank, with very similar services and mandates to Associated BancCorp. The bank offers services such as retail and commercial banking, wealth management, and mortgage banking to individuals and businesses.
It is also similar in size to Associated, with about 200 branch locations, but a bit less in assets with $26 billion.
Like the other stocks shared here, Fulton Financial has had some robust upgrades to its earnings revisions, giving it a Zacks Rank #1 (Strong Buy) rating. Next quarter’s earnings estimates have seen a dramatic 40% increase in the last two months.
Fulton Financial is also trading at a compelling relative valuation. Today, it trades at a forward earnings multiple of 9.5x, which is in line with the industry average and below its 10-year median of 13.8x. The company also pays a 4.3% dividend yield and has raised the payout by an average of 5.4% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors looking to add exposure to the financial sector, which shows numerous bullish variables, may want to consider one or all of the stocks shared above.
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Zacks Insights: This Sector is Dominating the Top-Ranks
With the Fed widely expected to cut policy rates this year, interest rates are broadly forecast to fall, and Financial stocks are set up to benefit considerably from this shifting dynamic. Banks in particular, which hold large securities portfolios, made up primarily of fixed income would benefit significantly as those assets should rally in response to a decline in interest rates.
In addition to banks, REITs (Real Estate Investment Trusts) should enjoy upward trending asset prices too, as real estate also benefits from the relationship between interest rates and securities, which are inversely correlated.
Also worth noting is that the Financial sector is hogging the Zacks rank with by far the most stocks on the list. Financials make up 49 names on the list, considerably more than the second most populous, Computer sector with 28 stocks.
Here, I will share three stocks which enjoy top Zacks ranks, pay generous dividend yields and appear to be some of the most attractive of the bunch.
Financial Sector Outperformance
One sign that financial stocks may experience a continued strong period is that the sector has shown relative strength compared to the market. In Q4 Financials have edged out the broad market in terms of performance by a fairly significant margin.
Image Source: TradingView
Associated BancCorp
Associated BancCorp (ASB - Free Report) is a bank holding company providing a range of financial services. Headquartered in Green Bay, Wisconsin, it operates through its banking subsidiary, Associated Bank, serving customers in the Midwest. ASB has $42 billion in assets.
The bank has more than 200 locations, serving more than 100 communities and offers various banking products and services, including commercial banking, retail banking, and wealth management. With a focus on community-oriented banking, Associated BancCorp plays a vital role in supporting individuals, businesses, and communities in its operational areas.
ASB has enjoyed unanimous revisions higher to its earnings estimates, giving it a Zacks Rank #1 (Strong Buy) rating. Earnings estimates have increased across future timeframes.
ASB is generous in returning cash to shareholders as is demonstrated by its large dividend yield and commitment to raising the payout. The current yield is 4.2%, and it has been raised by an average of 5.3% annually over the last five years.
Image Source: Zacks Investment Research
Associated BancCorp is also trading at a historical discount. Today, it trades at a one year forward earnings multiple of 9.3x, just below the industry average and well below it 10-year median of 14.1x.
Image Source: Zacks Investment Research
TANGER INC
TANGER INC (SKT - Free Report) is a real estate investment trust (REIT) that specializes in the ownership, management, and development of outlet shopping centers. The company owns and operates 38 shopping centers making up 14 million square feet and 3,000 retail stores.
I am personally a huge fan of TANGER INC shopping centers, which offer discounted luxury products and comfortable environments. Just a couple of years ago I bought a beautiful West Elm couch at a huge discount at one of their malls.
TANGER INC has experienced some nice earnings estimate revisions over the last two months, giving it a Zacks Rank #1 (Strong Buy) rating. The company also pays a 3.8% dividend, allowing investors to collect some cash while they own the shares.
SKT stock has been getting a lot of love since last summer, and the stock has been continuously trading higher on momentum breakout patterns. In the chart below you can see the stock has been consolidating and breaking out repeatedly in the last six months.
Right now, the stock is forming a very convincing descending bull flag. If SKT can breakout and close above the $27.60 level, it should make new multi-year highs. Alternatively, if it can’t hold above $2y, investors may want to wait for another opportunity.
Image Source: TradingView
Fulton Financial
Fulton Financial (FULT - Free Report) is also a regional bank, with very similar services and mandates to Associated BancCorp. The bank offers services such as retail and commercial banking, wealth management, and mortgage banking to individuals and businesses.
It is also similar in size to Associated, with about 200 branch locations, but a bit less in assets with $26 billion.
Like the other stocks shared here, Fulton Financial has had some robust upgrades to its earnings revisions, giving it a Zacks Rank #1 (Strong Buy) rating. Next quarter’s earnings estimates have seen a dramatic 40% increase in the last two months.
Fulton Financial is also trading at a compelling relative valuation. Today, it trades at a forward earnings multiple of 9.5x, which is in line with the industry average and below its 10-year median of 13.8x. The company also pays a 4.3% dividend yield and has raised the payout by an average of 5.4% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors looking to add exposure to the financial sector, which shows numerous bullish variables, may want to consider one or all of the stocks shared above.