2. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 58
P/E Ratio (TTM) as of April 17: 9.64
U.S. Bancorp (NYSE:USB) is a bank holding company, headquartered in Minnesota, US. The company offers a wide range of financial services to its consumers. JPMorgan gave a neutral stance on the banking sector considering the inflationary environment. In view of this, the firm lowered its price target on the stock to $45 but maintained an Overweight rating on the shares.
U.S. Bancorp (NYSE:USB) is one of the best dividend stocks on our list as it has raised its dividend payouts for 12 years straight. The company pays a per-share dividend of $0.48 every quarter and has a dividend yield of 5.39%, as recorded on April 17.
At the end of Q4 2022, 58 elite funds tracked by Insider Monkey were long U.S. Bancorp (NYSE:USB), compared with 52 in the previous quarter. The stakes owned by these funds have a consolidated value of $2.6 billion. Jean-Marie Eveillard, Ken Griffin, and Warren Buffett were some of the company’s most prominent stakeholders in Q4.
Madison Investments mentioned U.S. Bancorp (NYSE:USB) in its Q1 2023 investor letter. Here is what the firm has to say:
“U.S. Bancorp (NYSE:USB) shares are ensnared in the bank-run panic that began late in the quarter. Two large banks failed in early March as depositors rushed to withdraw money on concerns that the banks would suffer from liquidity problems. That’s a self-fulfilling prophecy, of course, but in the case of the two banks, it was prompted by the revelations of utter mismanagement of their securities portfolio. Bank models are, essentially, to borrow short and lend long. This sounds dangerous of course, and it would be if not for the deposit guarantee provided by the FDIC. The history of the U.S. banking system can be divided into two eras – pre-FDIC, when bank runs were fairly common, and post-FDIC, when bank runs have been close to non-existent. However, FDIC protection has its limits, and it remains incumbent on management to properly manage its assets and liabilities. The two banks in question didn’t do that. By taking down the share prices of all banks, we think investors are shooting first and asking questions later; they are not distinguishing between the strong and the weak.
U.S. Bancorp, as one of the largest and best-managed banks in the country, appears to be a net beneficiary so far of the panic among some depositors, with a pick-up in net deposit inflows in recent weeks. We don’t dismiss the probability of industry contagion – in a true nationwide panic, the big banks will suffer along with the small banks, and the well-managed ones will suffer along with the badly-managed ones. But we think the odds of that are quite small, and recent steps by federal regulators confirm that they will do everything in their power to prevent such a scenario, given the calamitous impact that it would have on our economy. We tightly manage this risk by limiting our exposure to the banking sector.”
