Hi everyone. I’m Tim Melvin, and welcome back to A Better Way to Wealth.
As you’ll see, we’re trying out a new format for the newsletter, and I think you’ll enjoy it.
Today, we’re going to talk about something very important that happened last week. I believe this is presenting an opportunity for folks like you to make an enormous amount of money going forward.
So let’s get right to it.
Last week, a well-known brokerage firm that specializes in financial stocks came out with a huge across-the-board buy recommendation on bank stocks.
It explained that the way things are currently setting up in the market, banks are expected to perform spectacularly well over the coming year.
Now, these stocks may not be as interesting as some of the high-flying tech stocks. But let me tell you… Banks are one of the best ways to invest.
I explained this particular strategy in a video update last month, but let’s briefly review it. This strategy has been tested and retested over and over again with great results, and I highly encourage you to do this with your own portfolio.
Here’s the strategy: Buy high-yield bank stocks with 3% dividend yields or higher, and you pay 10 times earnings or less for those stocks.
Doing this has generated such consistent one-, five-, 10- and 20-year returns that are well north of what even the most optimistic hedge fund manager would tell you to expect from the strategy.
It’s really simple: Low price to earnings (PE) & high dividend yield equals massive banking profits.
As I mentioned, the current market environment is setting up bank stocks for success.
First, although it is not fully with us yet, inflation does not appear to be all that transitory. So there is certainly the possibility that we’ll see higher interest rates down the road.
Second, we are seeing some signs of better loan growth — certainly better than the same time last year.
Third, banks have built up a lot of cash since the COVID crisis began. The Federal Reserve flooded the world with cash, and it’s all sitting in the banks.
That means that as rates move up, the banks can redeploy that cash into higher-yielding loans and investment securities. That’s going to drive earnings a lot higher.
Finally, banks remain in great credit condition. Banks came through the crisis in much better shape than anyone thought was possible.
So, banks have not only done an outstanding job over the past year, but they’re setting up for even further gains.
The Bank Stocks to Buy
With all of that said, I’m now going to give you the names of two picks that are representative of the stocks that I want you to buy.
No options, no leverage, no B.S. Just high-quality, well-run banks that are paying dividends, and you buy them at a low multiple.
First up is F.N.B. Corporation (FNB). This bank operates out of Pittsburgh, PA, but it has operations throughout the mid-Atlantic region.
We saw some recent insider buying in this name, as officers and directors are beginning to see the value in their own shares.
It trades at 10 times earnings, and it pays a 4.3% dividend yield. I’m very bullish on this bank stock right now.
New York Community Bancorp, Inc.
Next up is the king of high-yield banks: New York Community Bancorp, Inc. (NYCB).
Once again, there’s been significant insider buying, and the stock pays a 5.4% dividend yield. It’s also very attractively priced right now.
This is a really interesting bank, as it focuses on multi-family apartment lending, primarily in New York and New Jersey.
Now, you might be thinking that’s an issue because everyone is leaving New York. That’s true to a degree, but there are even more people staying put.
And this bank does an incredible job of evaluating and underwriting their loans. Just 0.6% of their assets are non-performing, which is a fraction of the national average for banks.
Furthermore, the stock is only valued at 11 times earnings, so there is a lot of upside in this name as well.
So, there are a couple of bank stocks to get you started with my high-yield, low PE strategy. But expect to hear more about this strategy from me going forward.
I truly believe it’s the single-best way to earn massively high long-term returns for your portfolio.
Now, before you go, I encourage you to watch today’s video in full for some additional color on this opportunity.
And if you haven’t already, please go back and watch my original video about this strategy.
Lastly, let me know what you think of the newsletter and the new format by emailing us at email@example.com.
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