The second-quarter earnings reporting season got off to a solid start on Friday, as Citigroup, JPMorgan, Wells Fargo and BlackRock all came in with results featuring better-than-expected revenues. The positive results could bode well for others in a sector that has struggled this year. Due to the implosion and failure of Silicon Valley Bank and others earlier this year, investors (especially institutional accounts) did what investors often do; they shot first and asked questions later, fearing a wide contagion in the banking industry.
While there is still a wary eye on Wall Street toward many of the top banks, even those with larger market capitalizations, the reality is there could be some huge total-return winners to grab before they report. Six top companies hit our 24/7 Wall St. financial services database screens, and all offer oversized dividends, are Buy rated and have yet to report earnings, but all should later this week.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Ally Financial
The bank with no buildings may be poised to have a strong second half of 2023. Ally Financial Inc. (NYSE: ALLY) is a digital financial services company that provides various digital financial products and services to consumer, commercial and corporate customers primarily in the United States and Canada. It was formerly known as GMAC and changed its name in May 2010.
Its Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floor plans and other lines of credit to dealers, warehouse lines to automotive retailers and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles and vehicle-remarketing services.
The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contracts and guaranteed asset protection products, and it underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory.
The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings.
The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies, leveraged loans and commercial real estate products to serve companies in the health care industry. The company also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services.
Investors receive a 4.37% dividend. Goldman Sachs has a $35 target price on Ally Financial stock. The consensus target is $31.39, and the stock closed on Friday at $27.49. The bank is scheduled to report on July 19.
Bank of America
Warren Buffett owns a stunning one billion shares of this bank. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.
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