Personal Finance

These 3 Regional Bank Stocks Pay Shareholders the Most


Data source: Chart by author.

It's not overly surprising that U.S. Bancorp, Capital One Finance, and PNC Financial sit atop their peer group when it comes to the amount of capital that they return to shareholders. These are, after all, the largest regional banks measured by the size of their respective balance sheets.

U.S. Bancorp is the largest, with $438 billion in assets, according to data from PNC Financial ranks second at $361 billion. And Capital One Financial brings up the rear, at $339 billion. To put this in perspective, the next largest regional bank, SunTrust Banks , has less than $200 billion worth of assets on its balance sheet.

Yet, while size is an important reason that these three banks are able to pay out so much to shareholders each year, it's not the only reason. Indeed, they have also been among the best-run banks over the past decade, thanks largely to their performances through the financial crisis.

By sidestepping the worst of the subprime mortgage bubble in the lead-up to the crisis, all three of these banks not only survived the downturn, but have thrived as a result of it:

  • U.S. Bancorp consolidated its position as the most profitable major bank in the country, with an industry-leading 14.4% return on equity over the past 12 months.
  • PNC nearly quadrupled in size over the past decade, thanks in no small part to its acquisition of National City Corporation at the trough of the 2008 crisis.
  • And Capital One has continued its unprecedented journey from a monoline credit-card lender to a full-fledged regional bank.

While many of their competitors have thus had to retreat and retrench over the last few years, hoarding capital instead of distributing it, all three of these banks have been able to grow their earnings, as well as the amount of capital that they return to shareholders via dividends and buybacks.

The net result is that, if you're looking for regional bank stocks that pay out a hefty chunk of change each year, you could do a lot worse than U.S. Bancorp, PNC Financial, and Capital One Financial.

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John Maxfield owns shares of US Bancorp. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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