Three of our latest featured stocks are from the financial sector, explains Kelley Wright, the editor of Investment Quality Trends and a specialist in assessing under and overvaluation based stocks' historical yield parameters.
First Merchant Corp. (FRME) as a new entrant to the Timely Ten; US Bancorp (USB) as a returner to the Timely Ten; and Mercury General (MCY), which is a Declining Trend stock that could get close enough to Undervalue to get interesting.
First Merchants makes its maiden venture into the Timely Ten due to a monster move in its internals. (Note, our Timely Ten is our current favorite buys as of each monthly issue.)
US Bancorp is a returner to the Timely Ten due to a big jump in its internals. Yes Virginia, there is a theme here. As the yield curve steepens so does the price curve on the financials.
First Merchants Corporation is the financial holding company for First Merchants Bank, which provides traditional community banking services such as time, savings, and demand deposits, and consumer, commercial, agri-business, and real estate mortgage loans.
The company also offers personal and corporate trust, brokerage and private wealth management, and letters of credit, repurchase agreements, and other corporate services.
First Merchant operates 124 banking locations in Indiana, Illinois, Ohio, and Michigan, as well as provides services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893, is headquartered in Muncie, Indiana, and has paid uninterrupted dividends since 1989.
Mercury General Corporation, together with its subsidiaries, writes personal and commercial automobile insurance in the United States. Additionally, the company writes homeowners, commercial property, mechanical protection, and umbrella insurance.
The company’s automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprised of dwelling, liability, personal property, fire, and other hazards.
Mercury sells its policies through a network of independent agents, insurance agencies, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. The company was founded in 1961, is headquartered in Los Angeles, California, and has paid uninterrupted dividends since 1986.
US Bancorp is a registered bank holding company headquartered in Minneapolis, MN. The company provides lending and depository services, cash management, capital markets, trust & investment management services, credit card services, merchant and ATM processing, mortgage banking, insurance, brokerage and leasing solutions through its primary banking subsidiary,
U.S. Bank National Association, and other non-banking subsidiaries. USB is the 5th largest US commercial bank by assets and deposits operating a branch network with 2,434 locations in 26 states primarily in the Midwest and Western regions.
The company ranks in the top 5 by deposit market share in 17 states, representing about 80% of its total deposits. It also ranks as the 2nd largest US corporate trustee. USB also benefits from a sizable global market position in payment services, including merchant processing, credit & debit card, and corporate payment products.
USB reported record revenues in 2020 despite pressure from lower interest rates, payment services fees, the impact of Covid-19, and the acquired State Farm Bank credit card portfolio.
In September of this year USB announced a purchase agreement to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (MUFG) in a transaction that will bring together two premier banks with focus on customers in California, Washington, and Oregon. Dividends have been paid since 1863.
