Bank Stocks Worth Buying for 2012

Once again we are at in December and another year has gone by at the blink of an year. This yea the US equity market has had its ups and downs especially with the domestic and European debt crises still far from being over. According to the analysts, next year will be more of the same and it is certainly prudent to shift any investment portfolio to equities with a solid foundation in revenues and profits. This is not a time for speculation as the debt crisis and unemployment numbers both in the US and Europe shows no signs of improving. Analyst are now advocating a shift to large blue chip stocks in major markets as there is a forecast of pending recession in Europe and possible stalling of economic growth in the US.

Most analyst are recommending large US financial companies as safe havens to park investments in the coming year. This is because many of the US banks have low European Union exposure couple with high dividend yields. Their prudency in managing the domestic business especially in the tightening of credit availability also makes these stocks very attractive to investors. Among the stocks to look out for in 2012 are Wells Fargo, US Bancorp, BB & T and PNC Financial Services.

Wells Fargo is recommended because of its minimal exposure to the European debt crisis. It’s business is also experiencing lower expense ratios and increasing net interest margin. This comes after the expense and balance sheet reorganization with it undertook after taking over the assets of Bank of Wachovia three years ago. The price for the stock is predicted to peak at around US$31 per share for 2012.

Analysts in Wall Street have recently upgraded the status of US Bancorp from a neutral rating to an overweight rating and increase the target price to US$31 from the initial estimate of US$29. This comes after third quarter results show an improvement of over 10% year on year. Another stock that was recently upgraded is BB & T which is holding entity for the Branch Banking and Trust Company. This financial institution based out of Winston-Salem showed a remarkable net interest margin in the third quarter of the year, improving almost 5% compared to the same period the previous year. It is even more amazing when the trend for the industry was showing negative growth during this period.

Finally PNC Financial Services remain a favorite among Wall Street analysts as it remain strong in all areas of the balance sheet. It is also due to take over the assets of RBC Bank USA from the parent company Royal Bank of Canada. This will make its assets and balance sheet even more attractive to investors.