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Private Briefingwith WILLIAM PATALON III, Executive Editor
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In the past, you used to be able to safely invest at the bank. But now, it might be wiser to invest in the bank, as the following institutions are looking more like attractive stocks to buy now.
Thanks to the U.S. Federal Reserve, interest rates will continue to be low for an extended period of time, meaning savers would be lucky to get 1%.
Meanwhile, bank stocks have gone from unloved and out of favor to being an industry on the verge of recovery - and able to pay dividends to shareholders.
Income investors have a new opportunity with certain bank stocks. Banks that eliminated or reduced dividend payouts to preserve capital during the crisis are now loosening the purse strings a bit.
For example, many regional banks are starting to reinstate and raise dividends. As residential and commercial real estate markets continue to stabilize, banks should start to grow once again and higher earnings will lead to very high rates of dividend growth.
These bank stocks should be part of every income investor's portfolio right now as the long-term prospects for capital gains in addition to income are excellent.
Here are a few that rank among the regional bank stocks to buy as they raise payouts.
People's United Financial Inc. (Nasdaq: PBCT) is an example of a bank stock that can provide much needed income to investors.
The bank has more than 400 branches in the Northeastern part of the United States and more than $30 billion in assets. The bank is in solid financial shape with nonperforming loans at just 2% of all loans, well below the average U.S. bank right now.
People's United Financial has plenty of excess capital and the shares trade for less than book value. At today's price the stock yields 4.77%, far in excess of what you earn by actually depositing your cash in one of its branches.
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