Financial stocks are one corner of the market that is set to reap the benefits under a second Trump administration. Bank stocks, both big and small alike, have been on a tear since President-elect Donald Trump won at the polls on Nov. 5, under the assumption that his return to the White House could lead to less regulation for the sector . This could also result in more lending plus merger and acquisition activity. Since Nov. 4’s close, the SPDR S & P Bank ETF (KBE) , which tracks a broad range of financial institutions, has rallied 11.3% through Monday. The SPDR S & P Regional Banking ETF (KRE) , which focuses more on smaller banks, has surged 13% during that period. Against this backdrop, CNBC Pro used FactSet data to screen for financial names that offer investors solid dividends, a steady stream of income and useful hedge against times of market uncertainty. To be included in the following table, stocks had to meet the following criteria: Be a member of the Financial Select Sector SPDR Fund (XLF) Have a dividend yield of at least 1.3% (greater than that of the S & P 500) Have a dividend growth of 10% or more Have gained at least 1% so far this month One name on the list was Morgan Stanley , up about 44% this year. The bank currently offers a 2.8% dividend yield, and has posted 10.2% dividend growth in the past year. In October, Morgan Stanley reported a third-quarter beat on top and bottom lines. “MS beat consensus on the strongest capital markets of the big five, good wealth results, and investment management inflows (even w/ongoing equity weakness),” wrote Wells Fargo analyst Mike Mayo. “Results likely provide an upward bias to consensus estimates.” In the same note, Mayo reiterated his underweight rating on the stock. Most analysts covering Morgan Stanley are neutral on the stock, with the average price target implying downside of about 10%. Another name on the list was Regions Financial , up about 36% in 2024. Regions’ dividend yield is at 3.8%, and the bank has grown its dividends by 18.9% over the past year. In late October, a trio of investment banks upgraded their ratings on Regions, citing a low valuation as a catalyst. Deutsche Bank was among them. “More recently, shares have tracked both the broader bank group and regional peers. From here shares should benefit from relatively low expectations, less risk of regulatory related earnings hits and a low valuation (on earnings) vs. peers,” wrote Deutsche analyst Matt O’Connor. Half the analysts covering the stock either deem it a buy or strong buy, according to LSEG. However, consensus price targets suggest a decline just shy of 1% could be in the cards for Regions Financial. Bank of New York Mellon has gained 50% this year. The stock currently has a 2.4% dividend yield and has demonstrated a dividend growth of 11.3% over the past year. The majority of analysts have a bullish sentiment on the name, and the average price target suggests the stock could rise another 4% from here, per LSEG. Following investor meetings with Bank of New York Mellon CEO Robin Vince, Deutsche Bank upgraded shares to a buy rating from hold in late September. “Overall, following the meetings, we came away more encouraged about BNY’s strategy and the firm’s ability to generate a more durable earnings growth path via: 1) disciplined expense control and a long runway of structural cost reduction, 2) stronger organic revenue growth potential over the long term, and 3) a solid capital return policy,” wrote analyst Brian Bedell. Other financial stocks offering solid dividends include investment bank Goldman Sachs and credit card provider Discover Financial Services .
link