Market analysis for financial stocks

Since everything went down recently (though my growth on AAPL looks good, and I think they’ll hit $250/share by the year’s end), I decided to take a look at the financial market and pick apart my favorites.  I came up with a good ranking, I think; if you want to jump into the market with maybe $5000, try starting here.  Doesn’t hurt to start with a little bit either (like $1000).

As an opportunity, I consider IMB a primary investment still.  IMB currently sits under $9/share and just paid a $0.25 dividend, currently at 11.9% yield.  Looks distressed, lots of financial pressure; the company cut the dividend from $0.50 to help them reorganize, and predicts a “mild” profit by 2Q2008.  High growth potential, high risk, but a worthy core investment for starting out.

C would make another good primary investment.  C currently sits close to $34/share with a $0.54 dividend, currently 6.30% yield.  Mildly distressed if anything, more like slightly annoyed; C has a high amount of capital and won’t fall apart so easily.  Growth potential mid range, low risk, but with its high dividends it still makes a great core stock.

I consider BAC a good secondary investment in this market.  BAC currently costs near $45/share and pays a $0.64 dividend, 5.64% yield.  Its high stock price and low dividend yield per share pushes me more toward C; BAC has great stability and influence but again C doesn’t look likely to need so much time to recover from the bad market.  Still, growth potential okay, risk low, good secondary buy.

USB looks stable too.  Currently valued at $32.86/share but paying a $0.40 dividend at only 4.87% yield.  USB holds steady through the current market even more than BAC.  Growth potential okay, risk extremely low, but with that low dividend I’d rather buy C.

I would love to get into the energy market but I need far more money than that.  If you want other dividend stocks, look to BBY (Best Buy) and WMT (WalMart) in the retail sector; both pay fair dividends and have obvious stability.  Remember to always have your broker do dividend re-investment!


~ by John Moser on December 9, 2007.

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