Can This Monster Bank Rise Above Its 52-Week High? Wells Fargo & Co. (WFC), Citigroup Inc. (C), Bank of America Corp (BAC)

Not all of Wells’ numbers are so impressive; in spite of the low-rate times we live in, investors would probably be cheered by a higher net interest margin. That important number came in at 3.56% in Q4, 10 basis points below the previous quarter and weaker than the 3.89% of 4Q 2011. It was also down for the full year, dropping to 3.76% from 2011’s 3.94%.

By contrast, BB&T’s 4Q net interest margin stood at 3.84%, while for the entirety of fiscal 2012, it was 3.91%.

Nevertheless, Wells’ upticks in revenue and surges in net profit are the products of fine performance and sharp management. They’re also putting more money back into the wallets of investors, another key reason the bank’s stock has traded northwards of late. On the back of those (generally) happy 4Q figures, the company hiked its dividend by 14% to $0.25 per share this past January. This was less than a year after it nearly doubled its payout to $0.22. If there’s one thing investors find hard to resist, it’s a rising dividend.

Very possibly, there will soon be more water coming from that pipe. In no uncertain terms, the bank’s CEO John Stumpf said it intended to return more lucre to shareholders.Wells isn’t entirely the master of its own destiny in this area (these days, it requires a nod from the Fed), but at the rate the company is going, it’s hard to imagine that this won’t happen.

What’s next

Mortgages will likely continue to be hot, given the improving macroeconomic climate and those skinny interest rates, so expect Wells Fargo to ride that prosperous road. And with the bank’s good performance in the stress test, it seems likely the Fed won’t take issue with its ambition to put more money in the pockets of its stockholders.

So the present and the near future both look good, but investors should dig in to 1Q results — scheduled to be unveiled in April — to see how well the bank is keeping up the good momentum. Not to mention whether it’ll manage to shore up that net interest margin.

The article Can This Monster Bank Rise Above Its 52-Week High? originally appeared on Fool.com.

Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

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