With bank stocks getting hammered in particular this week, my ?buy low, sell high? instinct took over and I?ve been researching the twenty-year histories of my three favorite companies in the sector: Wells Fargo (WFC), US Bancorp (USB), and JP Morgan (JPM). My general thesis about these companies is this ? despite the gloom and doom forecasts about the financial sector due to the Dodd-Frank Bill, limits on fees, problems with loans, and the crisis in the Eurozone, these three companies are quietly racking substantial profits, and all three are paying out paltry dividends (in terms of payout ratio) that are well below historical norms and have ample room to grow.
1. US Bancorp (USB) ? In 2007, US Bancorp paid out $1.63 in annual dividends relative to $2.43 in annual earnings, for a payout ratio of 67%. Right now, US Bancorp?s TTM earnings is $2.28 (yes, $.15 per share
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