In this article, we will be taking a look at 10 financial services dividend champions to buy now. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Financial Services Dividend Champions to Buy Now.
The financial services sector was one, like many others, that was terribly impacted by the outbreak of the coronavirus pandemic. However, it is also one of the few sectors that managed to weather the storm and is thus expected to grow at unprecedented rates in the aftermath of the virus’s outbreak. For instance according to the Financial Services Global Market Report 2021: COVID-19 Impact and Recovery to 2030, published by the Business Research Company, the global financial services market is expected to grow from 2020’s $20.4 trillion figure to about $28.5 trillion by 2025, growing at a compound annual growth rate of 6%.
As such, financial services stocks, particularly dividend-payers in the sector, like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V) and the dividend champions in this sector, are becoming increasingly popular stock picks among individual investors, hedge funds, and others.
What is a Dividend Champion?
A dividend champion, like a dividend aristocrat, is any dividend stock that has managed to grow its dividend consistently for at least the past 25 years without a break. The only major difference between these two categories of dividend stocks is that dividend champions need not be part of the S&P 500, unlike the dividend aristocrats. As such, these stocks do not need to meet certain criteria like market capitalization requirements, among other factors. These stocks thus offer investors a far more diverse range of options in terms of dividend stocks they can invest in.
While the pandemic should certainly not be taken lightly, and neither should its impact on different sectors of the economy, including the financial services sector, be underestimated, it is true that this particular sector is expected to fare well and positively recover from the economic hit the pandemic took on it. According to Heinbro Group, for instance, the banking and financial services sector will witness a healthy yet slow recovery throughout 2021, particularly in light of rising investments in the sector, especially in the Asia Pacific markets.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s take a look at the 10 financial services dividend champions to buy now.
Our Methodology
We have selected dividend champions in the financial services industry with dividend yields of over 2%. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield, years of consistent dividend increases, and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest yield. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Financial Services Dividend Champions to Buy Now
10. Westamerica Bancorporation (NASDAQ: WABC)
Number of Hedge Fund Holders: 10
Dividend Yield: 2.86%
Number of Years of Consistent Dividend Increases: 28
Westamerica Bancorporation (NASDAQ: WABC), the bank holding company for the Westamerica Bank, accepts a range of deposit products, while offering commercial, commercial, and residential real estate, real estate construction, and consumer installment loans. The company ranks 10th on our list of financial services dividend champions to buy now.
This April, Maxim analyst Michael Diana raised the price target on shares of Westamerica Bancorporation (NASDAQ: WABC) from $72 to $75, while reiterating a Buy rating on the stock.
In the second quarter of 2021, Westamerica Bancorporation (NASDAQ: WABC) had an EPS of $0.84, beating estimates by $0.07. The company’s revenue was $55.53 million, up 7.58% year over year and beating estimates by $3.18 million. Westamerica Bancorporation (NASDAQ: WABC) has gained 2.25% year to date.
By the end of the second quarter of 2021, 10 hedge funds out of the 873 tracked by Insider Monkey held stakes in Westamerica Bancorporation (NASDAQ: WABC) worth roughly $22 million. This is compared to 13 hedge funds in the previous quarter with a total stake value of approximately $24 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V), Westamerica Bancorporation (NASDAQ: WABC) is a good stock to invest in.
9. First Farmers Financial Corporation (OTC: FFMR)
Number of Hedge Fund Holders: N/A
Dividend Yield: 2.99%
Number of Years of Consistent Dividend Increases: 30
First Farmers Financial Corporation (OTC: FFMR), the financial holding company for First Farmers Bank & Trust, ranks 9th on our list of financial services dividend champions to buy now. The company provides checking and savings accounts, health savings accounts, youth accounts, business accounts, deposit and government accounts, certificates of deposit, and individual retirement accounts, among a range of other financial products and services.
Shares of First Farmers Financial Corporation (OTC: FFMR) have gained 10.30% in the past 6 months and 5.32% year to date.
Like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V), First Farmers Financial Corporation (OTC: FFMR) is a good stock to invest in.
8. Eagle Financial Services, Inc. (OTC: EFSI)
Number of Hedge Fund Holders: N/A
Dividend Yield: 3.25%
Number of Years of Consistent Dividend Increases: 35
Eagle Financial Services, Inc. (OTC: EFSI) is the bank holding company for Bank of Clarke County. The company offers a range of deposit products, one-to-four family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, and a range of other financial products and services. It ranks 8th on our list of financial services dividend champions to buy now.
In the second quarter of 2021, Eagle Financial Services, Inc. (OTC: EFSI) had a revenue of $12.29 million, up 15.73% year over year and beating the previous quarter’s revenue of $11.30 million. Eagle Financial Services, Inc. (OTC: EFSI) has gained 14.80% in the past 6 months and 16% year to date.
Like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V), Eagle Financial Services, Inc. (OTC: EFSI) is a good stock to invest in.
7. Old Republic International Corporation (NYSE: ORI)
Number of Hedge Fund Holders: 26
Dividend Yield: 3.35%
Number of Years of Consistent Dividend Increases: 40
Old Republic International Corporation (NYSE: ORI) is a company working in the insurance underwriting and related services business in the US and Canada. The company operates through its General Insurance, Title Insurance, and the Republic Financial Indemnity Group Run-off Business segments. It ranks 7th on our list of financial services dividend champions to buy now.
In the second quarter of 2021, Old Republic International Corporation (NYSE: ORI) had an EPS of $0.73, beating estimates by $0.21. The company’s revenue was $2.13 billion, up 8.23% year over year and beating estimates by $424.80 million. Old Republic International Corporation (NYSE: ORI) has gained 31.83% in the past 6 months and 43.79% year to date.
By the end of the second quarter of 2021, 26 hedge funds out of the 873 tracked by Insider Monkey held stakes in Old Republic International Corporation (NYSE: ORI) worth roughly $366 million. This is compared to 24 hedge funds in the previous quarter with a total stake value of approximately $377 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V), Old Republic International Corporation (NYSE: ORI) is a good stock to invest in.
6. Franklin Resources, Inc. (NYSE: BEN)
Number of Hedge Fund Holders: 30
Dividend Yield: 3.4%
Number of Years of Consistent Dividend Increases: 41
Franklin Resources, Inc. (NYSE: BEN), is a US-based multinational investment firm. The company invests in public equity, fixed income, and alternative markets and ranks 6th on our list of financial services dividend champions to buy now.
This March, BMO Capital’s James Fotheringham upgraded shares of Franklin Resources, Inc. (NYSE: BEN) from Market Perform to Outperform. The analyst also raised his price target on the stock from $22 to $36.
In the fiscal third quarter of 2021, Franklin Resources, Inc. (NYSE: BEN) had an EPS of $0.96, beating estimates by $0.18. The company’s revenue was $2.17 billion, up 82.89% year over year and beating estimates by $43.73 million. Franklin Resources, Inc. (NYSE: BEN) has gained 21.10% in the past 6 months and 35.33% year to date.
By the end of the second quarter of 2021, 30 hedge funds out of the 873 tracked by Insider Monkey held stakes in Franklin Resources, Inc. (NYSE: BEN) worth roughly $205 million. This is compared to 31 hedge funds in the previous quarter with a total stake value of approximately $198 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Wells Fargo & Company (NYSE: WFC), and Visa Inc. (NYSE: V), Franklin Resources, Inc. (NYSE: BEN) is a good stock to invest in.
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Disclosure: None. 10 Financial Services Dividend Champions to Buy Now is originally published on Insider Monkey.
