Three Dividend-paying Bank Stocks to Buy Whose Outlook is High

06/20/2025

Three dividend-paying bank stocks to buy whose outlook is high feature a prominent global investment bank and two traditional commercial banks.

The three dividend-paying bank stocks likely would be considered potential investments by Benjamin Franklin, a polymath whose occupations included diplomat, inventor, printer, publisher and investor was well diversified in rental properties, government bonds, bank stocks and bank accounts in three countries. That is the view of Mark Skousen, PhD, a descendent of Franklin who wrote about his famous relative in a new book, “The Greatest American.”

“In the good times, he saved money and invested wisely, so that when the bad times came, he was able to weather the storm,” wrote Skousen, a Presidential Fellow of economics at Chapman University and head of the Forecasts & Strategies investment newsletter. wrote about Franklin. “In 1772, there was a banking crisis in London, but Franklin survived by having his funds in two conservative banking houses that withstood the bank run.”

“Being out of debt myself, my credit could not be shaken by any run upon me,” Franklin wrote home.

Three Dividend-paying Bank Stocks to Buy Whose Outlook is High: GS

Good bank stocks not only proved to be successful investments in Franklin’s time but they are now, too. Skousen is recommending global investment bank Goldman Sachs (NYSE: GS) in his Forecasts & Strategies investment newsletter.

Goldman Sachs has once again topped $635 and has a double-digit-percentage profit of 38.69% in the past year and 10.48% so far this year. The company is predicted to post earnings per share of $9.69, indicating a 12.4% growth compared to the equivalent quarter last year. It also is selling at less than 12 times earnings.

Goldman Sachs is one of a handful of stocks that are recommended as part of Skousen’s Flying Five portfolio in his Forecasts & Strategies investment newsletter. The Flying Five consists of stocks that pay good dividends and trade at modest valuations. Skousen updates the stocks in the August issue of his newsletter but could end up keeping Goldman Sachs.



Caption: Mark Skousen leads the Forecasts & Strategies newsletter.

Citigroup also likes Goldman Sachs and rates the stock as a “strong candidate” for a secular re-rating due to its ongoing shift to a structurally higher return on equity (ROE), delivering superior and durable earnings per share (EPS) growth, best-in-class origination capabilities, private credit and wealth management. Plus, Citigroup wrote that Goldman Sachs has better than perceived resiliency in capital markets.

In addition, Citigroup wrote that Goldman Sachs has a proven DNA to adapt to a changing operating environment, and a course correction that creates a strong combination of scale and flexibility.



Chart courtesy of www.stockcharts.com.

Three Dividend-paying Bank Stocks to Buy Whose Outlook is High: PNC

Pittsburgh-based PNC Financial Services Group Inc. (NYSE: PNC) ranks as the seventh-largest banking company in the United States and offers a current dividend yield of 3.65%. PNC is recommended by Jim Woods in the Income Multipliers Portfolio of his Investing Edge newsletter. Woods also is a former U.S. Army special forces leader who heads the Crypto and Commodities Trader advisory service that is aimed at producing quick profits from both stocks and options, as well as certain cryptocurrencies. He has amassed more than 30 years of experience in the markets.

With that kind of background, Woods is willing to focus on either long-term or short-term investments, depending on the goals and risk tolerance of each investor. He identifies companies that offer both growth or stability and dividend payouts.



Jim Woods heads the Investing Edge newsletter and Bullseye Stock Trader.

Woods, a self-described renaissance man, is not the only one who likes PNC for its prowess as a regional banking giant and its consistent dividend payouts. Citigroup also recommends the company.

The investment bank has set a $200 target price for PNC that is derived from its discounted residual income model, incorporating its three-year forward earnings projection and other valuation metrics. The key inputs to the model assume a 10.3% cost of equity, including a risk-free rate of 4.5%, an equity risk premium of 3.5%, and a beta of 1.65, while assuming a perpetual growth rate of 3.0%.

Three Dividend-paying Bank Stocks to Buy Whose Outlook is High: Connell's Counsel

A money manager who also likes the outlook for PNC is Michelle Connell, who heads Portia Capital Management in Dallas. Connell counseled that PNC has been a consistent dividend payer even through the financial crisis, with its dividend yield growing 7% annually during the past five years.

"With over $500 billion in assets, PNC is considered one of the largest regional banking groups in the United States," Connell continued. "The bank is highly diversified across business segments, including investment banking and asset management. Their competitors cannot say the same."

PNC plans to continue its geographical expansion during the next five years, Connell told me. The bank's presence, formally focused on the East Coast, has grown to include the West Coast and the Southeast, she added.



Michelle Connell owns and is chief investment officer of Portia Capital Management.

In the next five years, PNC plans to invest another $1.5 billion to open 200 new branches and renovate 1,400 branches. The result will be greater brand recognition and market share, Connell added.

PNC has a healthy loan to deposit ratio of 75%. In comparison, 80%-plus is the average for regional banks, Connell opined. The bank also is adept at keeping its expenses under control.

"One of the strongest reasons for my support of the stock is that PNC has been returning over 50% of its earnings to a shareholders, either in the form of dividends or buybacks," Connell told me. "Another reason is its expansion strategy."

Currently, PNC trades at almost 1.4 times its book value. Since it has traded in a range of 1.1 to 1.7 times its book value in the past, she views its valuation as fair.

"I think dollar cost averaging or acquisition of shares on a pullback would make sense," Connell concluded.



Chart courtesy of www.stockcharts.com.

Three Dividend-paying Bank Stocks to Buy Whose Outlook is High: WFC

San Francisco-based Wells Fargo Corp. (NYSE: WFC) is rated as a BofA Global Research “buy.” One reason is that the Federal Reserve recently lifted the 2018 asset-cap to end a requirement that Wells Fargo incur an asset growth restriction from a 2018 enforcement action.

The Federal Reserve found that Wells Fargo met all the conditions for removal of the growth restriction, noting “other provisions in the 2018 enforcement action will remain in place until the bank satisfies the requirements for their termination.” The 2018 consent order, following a first third party review, stated the Fed could remove the asset cap prior to conducting a second sustainability review.

“Removal of the asset-cap is a positive catalyst, both fundamentally and for stock valuation,” BofA Global Research wrote.

BofA wrote that investors now can focus of the bank management’s aim to deliver Return on Tangible Common Equity (ROTCE) in 2026 and 2027 between 14.5% and 15.8%. When applying a 2x P/Tangible Book Value (TBV) to BofA's mid-2026 TBV implies a valuation per share around $90 or ~11.5x 2027 estimated EPS, which the investment bank sees as achievable in the next 12 months.

"We see potential for a new pool of investors who had been fatigued by the regulatory overhang to step-in given WFC's idiosyncratic growth story, room for efficiency gains in the consumer bank and potential for capital relief," BofA wrote. "We raise PO to $90 from $83."



Chart courtesy of www.stockcharts.com.

Three Dividend-paying Bank Stocks to Buy Whose Outlook is High: War Risk

Israel and Iran have fired missiles at each other due to the latter's advances in gaining nuclear capability that could be used to cause massive harm if channeled toward military purposes to attack its neighbor and their citizens. Israel's leaders warn that Iran was planning to provide nuclear weapons to its terrorist proxies in the Middle East.

Meanwhile, war continues to rage in Ukraine as Russia intensifies its attacks against its neighboring nations. Investors can take extra protection for potential fallout from the wars by holding shares in the four stocks, Woods advised.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

Sincerely,

Paul Dykewicz, Editor
DividendInvestor.com