Bank stocks are shares in the institutions that lend money, take deposits and move payments. They earn on the gap between what they pay for funding and what they charge for lending, which makes them unusually sensitive to interest rates and to the state of the economy. Below, our model ranks the bank stocks available on the US market by score and momentum, updated after each close.
| Stock | Momentum | Score | To target |
|---|---|---|---|
| Home Bancshares, Inc. (Conway, AR)Strong | 78 | 261 | +8% |
| Mitsubishi UFJ Financial Group, IncStrong | 74 | 241 | no target |
| M&T Bank CorporationStrong | 62 | 241 | +12% |
| Glacier Bancorp, IncStrong | 66 | 238 | +15% |
| Wells Fargo & CompanyStrong | 61 | 233 | +18% |
| ING Group NV ADRStrong | 65 | 229 | +14% |
| HSBC Holdings plcStrong | 58 | 226 | +17% |
| JPMorgan Chase & CoStrong | 70 | 226 | +12% |
| Sumitomo Mitsui Financial Group, IncStrong | 68 | 222 | -33% |
| Bank of America CorporationStrong | 45 | 221 | +25% |
| Banco do Brasil S.AStrong | 88 | 217 | -19% |
| Citigroup IncAverage | 54 | 209 | +24% |
| HDFC Bank LimitedAverage | 32 | 206 | +37% |
| Nu Holdings Ltd.Average | 61 | 194 | +24% |
| Resona Holdings IncAverage | 60 | 187 | no target |
The theme is not only American. JPMorgan Chase, Wells Fargo and Citigroup are US banks, while HSBC, ING, Mitsubishi UFJ and Sumitomo Mitsui reach the market as depositary receipts. That matters: a foreign bank is exposed to its own home economy, its own regulator and its own currency, even though you buy it in dollars.
Interest rates, in both directions. Higher rates usually widen the margin between lending and deposits — until they slow the economy enough that borrowers stop repaying.
Loan losses. The single number that decides a bad year. Provisions rise before defaults do, so the market watches the provision, not the default.
Capital requirements. Regulators decide how much capital a bank must hold, and that sets how much can be paid out to shareholders.
Confidence. A bank funded by deposits depends on those deposits staying. It is the one sector where sentiment can become the problem itself.
Because high debt is a bank's business, not a sign of distress. The Altman model reads a heavily indebted balance sheet as a warning, which is misleading for a bank — so we exclude financial companies from that part of the assessment.
Many pay a substantial dividend, but the payout depends on capital requirements and on how the loan book performs. In a downturn, regulators can restrict distributions. Check the payout ratio and the capital position on the individual stock page.
An ADR lets you buy a foreign bank in dollars on a US exchange, but the underlying business is still exposed to its home market, home regulator and home currency. The ticker is American; the risk is not.
After every close. Score, momentum and price targets are recalculated automatically, so the order always reflects the latest trading day.