5 Best Bank Stocks to Buy Amid Rising Inflation

3. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 93

Wells Fargo & Company (NYSE:WFC) is another multinational Fortune 500 company that provides diverse services of consumer and commercial finance, banking, mortgage products and services, insurance, and investments. On April 26, the firm announced a quarterly dividend of $0.25 per share, payable on June 1 to shareholders of record June 5. The forward dividend yield of Wells Fargo & Company (NYSE:WFC) is 2.64%.

Amid the rising inflation and mortgage rates, the company is set to profit as the firm relies mostly on U.S. retail and commercial banks. The Q1 2022 earnings report showed that the average loans come up to $898 billion, up by 3% from last year.

On April 18, Barclays analyst Jason Goldberg increased the price target on the stock to $64 from $62 and maintained an Overweight rating.

Investment management firm Davis Funds mentioned Wells Fargo & Company (NYSE:WFC) in its fourth-quarter 2021 investor letter. Here is what it said:

“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”