5 Best Diversified Bank Stocks to Buy Now

In this article, we will be taking a look at the 5 best diversified bank stocks to buy now. To see more of these stocks, you can go directly to see the 10 Best Diversified Bank Stocks to Buy Now.

5. East West Bancorp, Inc. (NASDAQ:EWBC)

Number of Hedge Fund Holders: 38

East West Bancorp, Inc. (NASDAQ:EWBC) is the bank holding company for East West Bank. It is based in Pasadena, California.

Jared Shaw at Wells Fargo reiterated an Overweight rating on East West Bancorp, Inc. (NASDAQ:EWBC) shares on April 21.

The average price target placed on East West Bancorp, Inc. (NASDAQ:EWBC) by Wall Street analysts is $70, and the shares were trading at $51.69 on April 29. This gives the stock an upside potential of 35.42%.

East West Bancorp, Inc. (NASDAQ:EWBC) had 38 hedge funds long its stock in the fourth quarter. Their total stake value was $434 million.

Aristotle Capital Management, an independent/employee-owned investment management organization, mentioned East West Bancorp, Inc. (NASDAQ:EWBC) in its first-quarter 2022 investor letter. Here’s what the firm said:

“We purchased East West Bancorp in the third quarter of 2017; however, our history with the business stretches back further having twice previously invested. Companies we consider to be high-quality like East West tend to remain high quality, and we have long admired the business for its uniqueness among the otherwise homogenous U.S. banking industry. Its dominant market share built over generations in Asian communities – and difficult-to-replicate experience due to culture, geography and business practices – create distinct competitive advantages in our view. During our most recent holding period, the bank achieved sustained loan growth, a catalyst we identified, through its continued leadership position as the financial “bridge” for customers doing business in the U.S. and China. Moreover, East West also realized market share gains in its headquarters state of California. With these catalysts nearing completion, we decided to exit our investment to fund the purchase of Oshkosh. As always, we will continue to study East West and, in the future, may once again find an opportunity to be investors.”

4. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 81

Citigroup Inc. (NYSE:C) is a diversified financial services holding company. It is based in New York.

An Outperform rating was reiterated on Citigroup Inc. (NYSE:C) shares on April 17 by James Fotheringham, an analyst at BMO Capital.

Analysts see Citigroup Inc. (NYSE:C) as a Moderate Buy since the stock has five Buy ratings and eight Hold ratings. They have placed an average price target of $55.86 on the shares, which were trading at $47.07 on April 29. This gives the stock an upside potential of 18.67%.

Our hedge fund data shows 81 hedge funds long Citigroup Inc. (NYSE:C) in the fourth quarter, with a total stake value of 7.5 billion.

3. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 87

Wells Fargo & Company (NYSE:WFC) is a diversified banking company providing investment, mortgage, and consumer and commercial finance products and services. It is based in San Francisco, California.

Analysts at Odeon Capital hold a Buy rating on Wells Fargo & Company (NYSE:WFC) shares as of April 17.

Analysts have placed an average price target of $47.04 on Wells Fargo & Company (NYSE:WFC) shares, with a high forecast of $55. The shares were trading at $39.75 on April 29. This gives the stock an upside potential of 18.34%.

There were 87 hedge funds long Wells Fargo & Company (NYSE:WFC) in the fourth quarter. Their total stake value was $5.6 billion.

Investment management firm, Davis Advisers, mentioned Wells Fargo & Company (NYSE:WFC) in its annual 2022 investor letter. Here’s what the firm said:

“Our investment thesis for our next largest bank investment, Wells Fargo, is totally different. As is well known, Wells Fargo & Company (NYSE:WFC) is the country’s third-largest bank, serving one in three U.S. households. Years of regulatory missteps under prior managements resulted in reputational damage, higher-than-average expenses, numerous consent orders, caps on asset growth, all added to the negative impact of low rates on their interest income. However, where others see bad news, we see resiliency and gradual improvement. Wells Fargo’s resiliency is reflected in the fact that despite years of terrible headlines and congressional hearings, Wells Fargo’s core customers stayed put and customer attrition remains extraordinarily low.

As to gradual improvement, new management has made steady headway in closing consent orders, settling regulatory matters and upgrading systems. Thus, rather than increasing profits from growth, Wells Fargo’s earnings growth for the next three-to-five years should come from the combined tailwinds of rising interest income, partially offset by normalizing credit costs, reduced expenses as systems improve and the scandals of the last decade are gradually put behind them, and the return of excess capital through share repurchases and rising dividends. The hypothetical earnings bridge displayed in Figure 6 gives some sense of the earnings power we see unfolding in the years ahead for this durable financial franchise.

While our grounded optimism carries the day, we are mindful of the risk that Wells Fargo’s historically excellent credit culture may have deteriorated, or that exasperated regulators may choose to extract even more major penalties for past infractions.”

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100

Bank of America Corporation (NYSE:BAC) is a diversified banking stock providing banking and financial products across the globe. It is based in Charlotte, North Carolina.

RBC Capital holds an Outperform rating on Bank of America Corporation (NYSE:BAC) shares as of April 19.

The average price target placed on Bank of America Corporation (NYSE:BAC) shares is $36.35, and the shares were trading at $29.28 on April 29. This gives them an upside potential of 24.15%.

In total, 100 hedge funds were long Bank of America Corporation (NYSE:BAC) in the fourth quarter, with a total stake value of $37.6 billion.

Oakmark Funds, advised by Harris Associates, mentioned Bank of America Corporation (NYSE:BAC) in its first-quarter 2023 investor letter. Here’s what the firm said:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”

1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

JPMorgan Chase & Co. (NYSE:JPM) is a diversified financial services company. It is based in New York.

An Outperform rating was reiterated on JPMorgan Chase & Co. (NYSE:JPM) shares on April 18 by analysts at Credit Suisse.

Analysts see JPMorgan Chase & Co. (NYSE:JPM) as a Strong Buy since it has 13 Buy ratings and four Hold ratings. The average price target placed on the stock is $160.94, and the shares were trading at $138.24 on April 29. This gives them an upside potential of 16.42%.

In total, 100 hedge funds were long JPMorgan Chase & Co. (NYSE:JPM) in the fourth quarter. Their total stake value was $5.2 billion.

Giverny Capital Asset Management, LLC, an investment management company, mentioned JPMorgan Chase & Co. (NYSE:JPM) to its first-quarter 2023 investor letter. Here’s what the firm said:

“This quarter marked the end of our third year in business. It has been a wild ride – launching at the start of the pandemic, watching a bubble in low-quality stocks and cryptocurrencies inflate and deflate, and generally living with a high level of volatility. On April 14, our holding JPMorgan Chase & Co. (NYSE:JPM) announced nice earnings for the first quarter and the stock rose 7%. In a truly efficient market, the largest, best- managed bank in America would not rise or fall 7% on a single data point. Yet, we see it regularly.”

See also 13 Best Bank Dividend Stocks to Buy and 11 Bank Stocks with Insider Buying and Selling Last Week.