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2020 would have been a breakout year for the banking industry as it continues to sustain the momentum gained in the last several years.
However, 2020 threw a curve ball and the COVID-19 pandemic brought the global economy to a standstill in March.
Despite the negative effects to the banking industry, a sliver of hope is slowly growing into a snowball of optimism as the world economy slowly re-opens in the heels of the sooner-than-expected arrival of the COVID-19 vaccine.
The SPDR S&P Bank ETF’s ( ) 20.7% return shows a solid performance worthy of bullish forecast for the banking industry.
And here’s some good news:
Just recently, the Investment banking firm Jefferies has given the banking sector a “modestly bullish” rating heading into 2021.
Considering this growing light at the end of the tunnel, here are 9 best bank stocks to invest on in this important worldwide economic recovery phase:
1. JP Morgan Chase & Co. ( )
Always a leading player in the banking industry and in the Wall Street trading game, JPMorgan is widely considered as the most solid and stable bank in the world today.
Despite the COVID-19 pandemic shutting down the global economy for months, JPMorgan is still seen as a winning stock to buy.
Driven by great leadership, strategic partnerships and innovative fin-tech technology, JPMorgan is in a good position to take its stock value even higher once the full economic recovery is felt in 2021.
2. PNC Financial Services Group ( )
Included in the top ten best bank stocks to invest on according to hedge funds, PNC Financial has strengthened its position by making sound investment decisions to further increase its revenue.
First, PNC has bought the US subsidiary of BBVA (Banco Bilbao Vizcaya Argentaria) to capture a wider market, and to top it all, PNC has endeared itself more to the public by becoming a great corporate citizen by pledging millions of dollars to help COVID-19 affected small business owners.
Not only that…
“Last thing about PNC is valuation. Twelve percent return on equity which is great. Trading at under 1.2 times the book value. The price is right. The dividend yield is north of 3 percent. They’ve doubled their dividend in the last five years and the dividends should grow. So, buy PNC.”
Grace Capital’s Catherine Faddis told CNBC
3. First Republic Bank ( )
With a total Hedge Fund position value of $1.22 billion and a year-to-date return of 11.7%, First Republic Bank’s business model has a proven track record and a strong client-based that is further expanding because of satisfied referrals that amount to an additional 25% of clients.
As the economy slowly re-opens, the banking industry is expected to receive a boost and First Republic Bank is among those always shortlisted to benefit from the incoming restart of the global economy.
4. Capital One Financial Corporation ( )
The current economic recession may have hit Capital One hard, but its history of strong stock performance and revenue growth will usher it to renewed profitability and improved business once the economy fully re-opens.
Financial watchers see Capital One’s stock value to become more attractive in the high $50s, while trading less than 70% of its tangible book value.
5. Mastercard ( )
The leading electronic card payment company is expected to benefit from the expected revenge spending of consumers once the economy comes back to pre-COVID-19 days.
With the good news of vaccine development and upcoming distribution, Mastercard is primed to get back to its previous earning levels.
Now is a great time to swipe up some shares of Mastercard.
6. Bank of America Corporation ( )
While the COVID-19 pandemic has included Bank of America as among its casualties when it caused an economic slowdown, it also left BAC’s stocks trading at a cheap.
This could present a favorable upside for investors since Bank of America is sure to gain back what it lost and then some once the world economic recovery settles back to its rightful path.
With the vaccine for the COVID-19 virus just around the bend, BAC’s stock value could get a huge boost as twice its current tangible value in the next year.
7. Wells Fargo ( )
Wells Fargo has experienced many ups and downs but remains as still one of the major consumer banks in the United States.
Despite the negative effect of the 2020 global pandemic, the value of Wells Fargo is valued at around 80% of its actual worth, thus making it one of the cheapest banking stocks in the trading market today.
Once the economy comes back to normal following the distribution of the COVID-19 vaccines, Wells Fargo’s stock value and other indicative numbers are expected to increase.
8. Citigroup ( )
Citigroup is another banking giant that follows the trend of the economies of the United States and the rest of the world.
As we move further into the resurgence of global economy—post COVID-19 vaccination—analysts are expecting to see Citigroup’s valuation to soar and help reinvigorate the industry by instilling consumer confidence.
The already inexpensive Citigroup stocks will make an expected huge leap in the year 2021.
So, its better to ride the C-train right now.
9. Goldman Sachs ( )
Although not really a retail bank per se, Goldman Sachs is a capital markets bank that also falls into the banking industry category.
Even with the ongoing pandemic, GS’s quarter numbers for 2020 still managed to increase from net revenues to wealth management revenues.
As the United States and the rest of the world focuses on the re-opening of economies, expect a rosier outlook for the stock value of Goldman Sachs.
The red-hot market performance of GS will only get even hotter.
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