Friday, October 18, 2019

A No-Drama Quarter From U.S. Bancorp With Increased Capital Returns On The Horizon

If you want an exciting, dynamic bank, you don’t really look at U.S. Bancorp (USB), but if you want a steady, high-margin performer, particularly during tougher times in the banking cycle, this is a name you consider. To that end, U.S. Bancorp’s third quarter results didn’t have a lot of surprises, though the company’s decision to accelerate capital returns to shareholders was a welcome update.

Management’s recent investor day highlighted some meaningful growth opportunities for U.S. Bancorp, including ongoing investment in payment technologies, branch-lite digital-driven organic consumer banking growth, and maybe even some M&A. Pre-provision growth will probably drop to the low-single digits next year, and I’m only looking for around 3% long-term core earnings growth, but this is a very profitable, well-run bank that is trading at a reasonable valuation today.

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A No-Drama Quarter From U.S. Bancorp With Increased Capital Returns On The Horizon

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