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Big Banks in View Ahead of Earnings: BB&T and JPMorgan

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Major bank stocks are often known for their dividends, so this industry is always on the radar of Ryan McQueeney, editor of the Zacks Income Investor portfolio. With a few of the biggest names in the business set to kick off Q3 earnings season, Ryan highlighted a pair of stocks to watch in this week’s video.

The first company on today’s episode is JPMorgan (JPM - Free Report) , one of the major banks reporting earnings next Friday. JPMorgan has outperformed an, albeit sluggish, industry this year, flexing its dominance has a flattening yield curve has put pressure on some of its peers.

Still, the financial sector just has not seen the gains many would expect to see in a rising rate environment. For the soon-to-be-reported quarter, JPMorgan is projected to notch EPS growth of nearly 28%—an indicator of the growth catalyst that is a higher interest rate—but estimate trends have not been favorable.

Indeed, JPMorgan has witnessed a handful of negative earnings estimate revisions within the past 60 days. The Zacks Consensus Estimate for the quarter has slipped three cents from where it was just two months ago.

However, JPMorgan is a consistent earnings performer and rarely, if ever, misses bottom-line expectations. The stock still has a Zacks Rank #3 (Hold) and presents a dividend yield of nearly 3%. This type of reliability might attract even more investors if the company can outperform next Friday, so we’ll want to keep a close eye on this one.

Interestingly, there is just one buy-ranked stock in JPMorgan’s industry, the “Banks – Major Regional” group. This stock is BB&T Corporation (BBT - Free Report) .

It has been an up-and-down year for BB&T, but recent earnings estimate revisions have lifted the stock to a Zacks Rank #2 (Buy). The stock has bounced off its year-to-date lows and now looks poised for a strong earnings report.

Moreover, BB&T trades at just 12x forward earnings and presents a dividend yield of 3.3%. Make sure to check out the video to see Ryan explore the company’s chart and explain why it has been flagged by the Zacks Rank system!

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