Since the Presidential elections, banking stocks have been witnessing a bullish trend. Additionally, the Fed rate hike added to the rally. Further, the promises made by the Trump-regime (lower tax rates, lesser regulations and increased infrastructure spending) led to investors’ optimism.

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

Further, this Zacks Rank #2 (Buy) stock has risen over 23.1% year to date compared with 19.5% gain for the Zacks categorized Major Regional Banks industry.



Why a Solid Choice?

Revenue Strength: U.S. Bancorp’s net total revenue has risen at a compounded annual growth rate (“CAGR”) of 1.8%, over the last three years (2013–2015). The sturdy top-line increase has been backed by strong loan and deposit growth. In addition, U.S. Bancorp expects long-term revenue growth in the range of 6–8%.

Further, the company’s projected sales growth of 4.8% for 2016 and 3.6% for 2017 ensures continuation of the upward revenue trend.

Earnings per Share Growth: U.S. Bancorp has witnessed 2.4% growth in earnings per share over the last three to five years. Management projects earnings growth rate in the 8–10% range, over the long term. Notably, earnings are estimated to grow at the rate of 2.9% for 2016 and 4.9% for 2017.

Superior ROE: U.S. Bancorp’s Return on Equity (ROE) ratio is 13.30% compared with the industry average of 8.65%. This indicates that the company reinvests more efficiently compared to the industry.

Strong Leverage: The debt-to-equity ratio for U.S. Bancorp is 0.89 compared with the industry average of 0.90. This indicates greater financial stability for the company and lesser risk for shareholders.

Impressive Capital Deployment Plans: U.S. Bancorp consistently enhances shareholders’ value with impressive capital deployment activities. In Sep 2016, the company raised the quarterly dividend by 9.8% to 28 cents per share. Notably, it has a dividend yield of 2.32% compared with industry average of 2.26%. Further, the company has $2.6 billion share repurchase authorization in place. Additionally, U.S. Bancorp expects to remain in its targeted payout ratio of 60–80%.

Other Stocks Worth Considering

Some other major regional banks worth considering include Comerica Incorporated (CMA Quick QuoteCMA - Free Report) , Bank of America Corporation (BAC Quick QuoteBAC - Free Report) and Citigroup Inc. (C Quick QuoteC - Free Report) .

Comerica witnessed an upward earnings estimate revision of 9.6% for 2016, over the past 90 days. Also, its share price is up 61.8% over the last six months. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of America carries a Zacks Rank #2 and has witnessed an upward 2016 earnings estimate revision of 15.7%, over the past 90 days. Moreover over the last six months, its share price is up 66.7%.

Citigroup, with a Zacks Rank #2, has witnessed an upward 2016 earnings estimate revision of 2.2%, over the past 90 days. Moreover, over the last six months, its share price is up 41.7%.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>