) is the second largest bank in the U.S. by market
capitalization and competes with other prominent firms
like Bank of America (
), and Citigroup (
) among others. Below we look at three key business divisions that
drive Wells Fargo's stock value.
Our price estimate for Wells Fargo stock stands at
, which is about 10-15% above market price.
The 3 Most Important Business Divisions for Wells
1) Mortgages - 29% of the company's stock value
The mortgage business of Wells Fargo includes home mortgage
loans, mortgage servicing business and mortgages held for
sale. Wells Fargo is the largest originator of mortgage loans
in the U.S. with originations of $386 billion in 2010. It is also
the 2nd largest servicer (processes monthly payments of mortgage
loans) of mortgages in the U.S. with rights for servicing $1.8
trillion of mortgages for its clients.
Wells Fargo's mortgage business earns interest in the form of
monthly payments on home loans, servicing fees on mortgage serviced
for clients, interest on mortgages held for sale and gains upon
See the top forecasts for the mortgage division
2) Asset Management & Brokerage - 19% of the company's
Wells Fargo's earns non-interest income by providing asset
management, investment, retirement and brokerage services to
clients in the U.S. Its clients span households, small, medium and
large businesses, governments, institutional investors and
With close to 1,300 Wells Fargo Advisors offices nationwide,
Wells Fargo meets brokerage need of close to six million
households. It also provides brokerage service through many of its
banking stores and other channels.
See the top forecasts for the asset management & brokerage
3) Securities & Trading - 18% of the company's stock
Wells Fargo, through its security & trading division, trades
corporate debt, U.S. government agency obligations and other
securities acquired for the purpose of short-term appreciation. It
also engages in derivatives trading.
The company also holds debt securities, including mortgage
backed securities and marketable equity securities for investment
purposes. It also invests in non-marketable securities like venture
See the top forecasts for the securities & trading
See our full analysis of Wells Fargo stock