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These Bank Stocks Are All Up 60% Or More This Year

From Zacks: The operating environment has not been favorable since the beginning of 2016, but the finance sector has finally emerged triumphant. The nation’s economic health, which the sector is largely dependent on, has improved decently as indicated by increasing real GDP numbers, declining unemployment rate, improving consumer spending and stabilizing housing market.

All these led to most awaited interest rate hike this month. The interest rate was hiked to 0.50%–0.75% from 0.25%–0.50% raised in Dec 2015.

In a press conference, following the decision, Federal Reserve Chairwoman Janet Yellen said: “My colleagues and I are recognizing the considerable progress the economy has made toward our dual objectives of maximum employment and price stability … We expect the economy will continue to perform well, with the job market strengthening further and inflation rising to 2 percent over the next couple of years.”

Except REITs, the other Finance sector constituents – banks, brokerage firms, asset managers and insurers – typically benefit from a rising rate environment.

Also, the finance companies’ performance in the third quarter was decent, despite a challenging operating environment. The companies were able to maintain bottom-line growth with improved loans and deposits, and efficient cost-control measures. Further, trading volumes improved, while mortgage lending showed strength.

In addition, financial stocks have witnessed a post-election rally. Riding on higher rates and improved lending margins, along with the expectation of lesser regulations under Donald Trump administration, the finance sector has gained 8.1% since the election date. Trump’s proposed infrastructure spending plans, tax cuts and reduced regulations are likely to spur economic activity.

Though the ongoing structural changes are expected to continue, with investments in emerging technologies, initial market reactions post election results indicate improved prospects for financial stocks in 2017.

We have picked seven stocks that not only outperformed the market, but also possess solid growth prospects.

Selecting the Winning Stocks

We have taken the help of the Zacks Stock Screener to shortlist financial stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and 60% or more positive share price movement.

Here are the top seven financial stocks that meet the criteria:

Dallas, TX-based Comerica Inc. (CMAFree Report) is a diversified financial institution, providing various financial products and services across Texas, California, Michigan, Arizona and Florida, and in Canada and Mexico.

Zacks Rank: #2
Market Cap: $11.9 billion
Year-to-date Price Change: 65.0%

You can see the complete list of today’s Zacks #1 Rank stocks here.

CenterState Banks, Inc. (CSFLFree Report) , headquartered in Davenport, FL, is engaged in providing various consumer and commercial banking services to individuals, businesses, and industries in Florida.

Zacks Rank: #1
Market Cap: $1.2 billion
Year-to-date Price Change: 62.6%

Looking for the Best Stocks for 2017? Be among the first to see our Top Ten Stocks for 2017 portfolio here.

Independent Bank Group, Inc. (IBTXFree Report) , headquartered in McKinney, TX, is a bank holding company for Independent Bank, providing a range of commercial banking products and services to businesses, professionals, and individuals in the U.S.

Zacks Rank: #2
Market Cap: $1.2 billion
Year-to-date Price Change: 97.2%

Plano, TX-based LegacyTexas Financial Group, Inc. (LTXBFree Report) provides various banking and financial services in the U.S.

Zacks Rank: #2
Market Cap: $2.1 billion
Year-to-date Price Change: 71.8%

SLM Corporation (SLMFree Report) headquartered in Newark, DE, operates as a saving, planning and paying for education company in the U.S. It offers private education loans to students and their families.

Zacks Rank: #2
Market Cap: $4.7 billion
Year-to-date Price Change: 67.9%

UMB Financial Corporation (UMBFFree Report) headquartered in Kansas City, MO, provides various banking and other financial products and services in the U.S. and internationally.

Zacks Rank: #1
Market Cap: $3.8 billion
Year-to-date Price Change: 64.2%

Salt Lake City, UT-based Zions Bancorporation (ZIONFree Report) is a financial holding company, providing a range of banking and related services in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The company offers community banking services as well.

Zacks Rank: #1
Market Cap: $8.9 billion
Year-to-date Price Change: 60.2%

The Financial Select Sector SPDR Fund (NYSE:XLF) closed at $23.58 on Friday, up $0.04 (+0.17%).

XLF currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 37 ETFs in the Financial Equities ETFs category.

This article is brought to you courtesy of Zacks Research.

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