After the recent sell-off in the banking sector following the collapse of Silicon Valley Bank, the opportunity to invest in U.S. Bancorp (USB:NYE) at an attractive price is too good to ignore. While bank stocks may not be the most exciting investments, U.S. Bancorp’s position as the fifth-largest bank in the United States with $585 billion in total assets, and a strong history of operations, makes it a stable and secure investment choice.
U.S. Bancorp occupies a favorable position between the four global systemically important banks and regional banks, allowing it to benefit from size and scale advantages while avoiding some of the more onerous regulations. The bank’s investments in technology and strong balance sheet make it a prime candidate for a buyout in the future.
USB Stock Forecast:
Analysts see high potential for USB stock, with a Buy consensus rating and an average price target of $52.53, implying a 46% upside potential. The USB stock is undervalued, trading at just 7.3 times earnings, and has a dividend yield of 5.34%, making it an attractive investment option for income-seeking investors.
U.S. Bancorp is also well-positioned during the current crisis, as evidenced by its participation in loaning $30 billion to First Republic Bank in an effort to stabilize the banking system. The bank has a 50% payout ratio, has paid a dividend for 20 consecutive years, and has increased its annual payout for 12 years in a row.
Investors who recognize the potential for U.S. Bancorp can benefit from an advantageous time to acquire a top-performing bank at an attractive price.
