There is no doubt that Financials are out of favor, as the sector is down over 4% YTD, the worst in the S&P 500. I understand that big banks continue to have big problems, but what about some of the smaller, well-capitalized banks? It would seem that there are some great bargains in that group, so I set up a screen to try to capture them.
The goal, then, was to identify stocks with stable to rising dividends well above that of the market and with low valuations relative to their assets. The fact that these companies didn't cut their dividend during the downturn and that they are growing their earnings says a lot. Many of these banks have been flooded with deposits at a time when loan demand is slack, potentially creating some earnings leverage as the economy improves.