Best Banks With 4% Yields
We haven’t really talked about banks recently.
Outside of utilities, banks have the highest concentration of dividend payers.
Banks love paying dividends!
Banks are where we keep our money, and they’re highly regulated… so they tend to be safer investments than other stocks (like tech companies).
And as a dividend investor, I like my investments to be safe.
The largest banks, like JPMorgan Chase (ticker: JPM), Bank of America (ticker: BAC), and Wells Fargo (ticker: WFC), are popular because of their stability.
But they all have low dividend yields of around 2%.
To find higher yields in the banking industry, we need to look at smaller, regional banks.
Regional banks focus on a specific geographic area.
And size is important… otherwise they’ll get squashed by the larger banks.
Here is a list of my favorite regional banks… and they all have yields above 4%!
One of the largest regional banks around is US Bancorp (ticker: USB).
US Bancorp has a very large region… it includes the entire Midwest and Western states!
It has a dividend yield of 4.1%, but the yield isn’t the best part.
US Bancorp is one of the only regional banks raising its dividends every year.
Its next increase should be its upcoming payment at the end of September.
And US Bancorp’s financials look great.
Its Return on Equity (ROE) is one of the highest in the industry at 11.7%.
Valley National Bancorp (ticker: VLY) isn’t nearly as big as US Bancorp.
It only operates in New York, New Jersey, and Florida.
But Valley National has an excellent 4.2% dividend yield.
And the company is expanding.
Since 2017, deposits at Valley National have averaged almost 14% growth every year.
And commercial loans have increased almost 20% every year since 2017.
However, leverage is what really draws me to Valley National.
Valley National’s debt/equity ratio is less than 0.5x, which is 25% lower than the industry average.
So when a recession hits, Valley National is able to weather the storm.
Truist Financial’s (ticker: TFC) 4.5% dividend yield is one of the highest among regional banks.
Truist was formed in 2019 from the merger of SunTrust (a regional bank in the Southeast) and BB&T (a regional bank in the Mid-Atlantic) to make one of the largest regional banks around.
And Wall Street analysts love the stock.
They expect earnings to average more than 13% growth over the next 5 years.
Regional banks are a must-have for any dividend investor.
And there are so many of them!
What regional banks do you own?
Michael Jennings, Editor
Dividend Stocks Research
Category: Dividend Stocks To Buy?, Dividend Yield
