|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||120.63 - 122.02|
|52 Week Range||101.16 - 126.54|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.44%|
Overall, the industry has faced criticism of lower payouts, largely due to select banks’ stress-test failure in recent years. Citigroup (C) has been rewarding investors with dividends and repurchases as its profitability and margins have improved.
Banks (IYF) enjoyed a strong run in 2016 and 2017 helped by higher rates driving NIMs (net interest margins), expansion of asset management activity, higher inflows, strategic transaction advisory, and trading activity. EPS growth of 8% in 1Q18 can be helped by lower operating losses, higher net interest margins, and an expected pickup in credit offtake.
Wells Fargo (WFC) has seen its expenses rise in recent quarters on litigation accruals due to mortgage regulatory investigations, account sales practices, and other matters related to retail and corporate clients. Other banks (IYF) including Goldman Sachs (GS), JPMorgan Chase (JPM), and Bank of America (BAC) saw their spending rise in 4Q17 primarily due to higher compensation. Wells Fargo’s 4Q17 non-interest expense of $16.8 billion included operating losses of $3.5 billion, up from $1.3 billion in 3Q17.
The era of rate hikes since December 2015 has proven to be beneficial for commercial banks (IYF). Net interest margins have risen due to a difference between the cost of funds raised and money that was loaned. As rates steepen—with the federal funds rate at 1.5% and the Federal Reserve hinting at another three or four rate hikes in 2018—credit offtake can slow amid lower tax rates.
Along with other sector exchange traded funds, the Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, has pulled back in recent days, but many market observers maintain the ...
Bank of America (BAC) has expanded its shareholder payouts since its stress test clearance in 2017. The bank grew its dividend by 60% to $0.12 in 4Q17 on a YoY (year-over-year) basis, which was in line with its strong growth in operating performance. Overall, the industry has paid out higher rewards to shareholders in the form of dividends and buybacks.
Banks have managed to get favorable ratings in recent quarters from Wall Street analysts, backed by rising rates, equity allocation, and investment banking revenues, and partially offset by the recent weakness in trading revenues. Among major bankers (IYF), Bank of America (BAC) seems to be a favorite. Twenty-two of the 30 analysts covering the stock have given it a “buy” or “strong buy” rating.
Financial stocks and sector-related exchange traded funds have underperformed early in 2017 but have recently been among the top performing areas of the U.S. equity market. “In the current economic environment, ...
This article was originally published on ETF Trends.com. The financial sector has mostly fallen behind other U.S. market segments over the years, but 2018 may be the year that financials-related ETFs finally ...
Banks (IYF) have enjoyed strong credit growth amid near-zero interest rates as leveraging and carry trade have been profitable.
NIMs (net interest margins) for commercial banks have grown at a faster pace over the past couple of years, resulting in higher net interest income.