The banking industry is bouncing again after a stiff year.
Banks have had a poor year and were on the lower side of performance in the stock market. The global pandemic has hit the banking sector like a hurricane. The reason why banks have been on the downside is that they were facing the risk of loan defaults—vulnerable to unemployment increase continues.
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Due to the complications in the banking sector, things can be unpredictable. Still, the basic banking system is easy to come across and understand how these businesses make their money.
Banking stocks have done good in November following the vaccine news. Yet, they lag behind other sectors such as tech stocks that rebounded quickly during the Q3.
So, let’s have a look at the top three bank stocks for long-term investment.
JPMorgan Chase & Co. (JPM)
The biggest U.S. bank, JPMorgan Chase (JPM) has become one of the biggest growth investment stocks. JPM stock is pushing back to where it left in February 2020 around the $139 price mark.
JPMorgan is effortlessly the most profitable of top banks across the globe. The bank covers every part of both investment and commercial banking. JPMorgan has done pretty well in diversifying its credit card and auto loan businesses over the past few years.
JPMorgan is the only remaining big bank that survived and found its way out of the financial crisis. A company with a market value of $381.23 billion is way too difficult to default. The basics are strong and JPM stock is a long-term growth investment.
For analysts, JPMorgan (JPM) is a great investment for long-term growth.
Citizens Financial Group, Inc. (CFG)
Small regional banks like Citizens Financial Group (CFG) has had a bumpy year with tough financial circumstances. Since, March 11, CFG shares price have soared by 51.5% to date. However, the stock is down by 11% year-over-year.
During the third quarter, the company declared a Q4 dividend for common stock of $0.39 per share. The quarterly dividend grew 8% from the last year’s period despite the pandemic impact. The revenue with noninterest income was up 33% from last year. While the Mortgage and strength in Capital Markets CET1 ratio look encouraging with a 9.8% increase.
Moreover, the company has gained pre-provision profit up by 21% from the prior-year period. Also, the operating leverage is positive at 7.8% in Q3.
The CEO of CFG, Bruce Van Saun highlighted that they have come across unique challenges this year and have delivered better than expectations for their stakeholders. Citizens Financial expects to continue the Q3 growth and demonstrate the strong resilience of its business model in 2021.
The PNC Financial Services Group, Inc. (PNC)
A bank holding company and financial services corporation, The PNC Financial Services had performed decently this year. Considering a squeezing year, PNC has done well enough to sustain its position in the stock market.
PNC was among the top five best-performing banks in November 2020, rising by 24.9%. Moreover, PNC has announced that it is planning to buy BBVA’s U.S. operations.
With that, Analysts at UBS upgraded PNC’s stock rating from Sell to Neutral. PNC has performed better than most of the top banks, which makes it a considerable long-term investment amid the pandemic challenges.