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With recovery in the housing sector, it's a good time to add financials into one's portfolio for 2013. The improvement in the housing industry is also good news for banks, where mortgage volumes have shown a steady increase in the fourth quarter of 2012. U.S. mortgage originations for the first quarter stood at $372 billion against $290 billion in 2012. The big banks, like Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) have gained from this improvement, which is reflected in the performance of their mortgage banking divisions. A further improvement in the economy could boost the earnings of the financials, which could result in a possible increase in shareholders' value.

Discussed below are three financials that have a track record of enhancing shareholders' value. All three stocks have a positive past five-year EPS growth, with a dividend yield over 3% and a payout ratio of less than 45%.

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* as on 3rd April

Toronto-Dominion Bank (NYSE:TD) is the sixth-largest bank in North America with over 22 million global customers and C$818B in assets. The Bank mainly operates in four key segments: Canadian banking (personal and commercial), wealth and insurance, wholesale banking and securities and U.S. banking (personal, commercial and auto financing). All four divisions generate impressive earnings with a growth rate of around 11%-15%. TD's undivided focus on customer service and convenience is its real competitive advantage, and even the company's branches are open 45% more hours than its competitors.

In the last 10 years, TD has strategically shifted to the less risky franchise dealer model. Apart from this dramatic transformation, the company has been fueling growth through strategic acquisitions. Recently, the bank acquired Epoch Holding Corporation in a deal that is expected to close by 2014.

The banks' Basel III Common Equity Tier 1 capital has been steadily rising every quarter for the past year. Because of its capital cushion and robust operations, TD has consistently been named one of the strongest and safest banks by the financial press. The company is well managed with quality dividends, which is only expected to rise in the future. The bank currently has a payout ratio of about 37.2%, while the management is targeting a payout in the range of 40%-50%. For the past few years, dividend yield for the company has been around 3.8%, so any increase in the dividend will eventually result in the appreciation of the stock price.

Western Union (NYSE:WU) has been around since 1851 and has become an iconic brand with more than 500,000 agents worldwide. Long gone are the days of the telegraph, but the company still thrives as a global money transfer and payment business, owing to its simple yet profitable business model. More than 80% of the company's revenues come from consumer-to-consumer money transfers. The company's stock has recently been falling due to the grim revenues forecast by the company for 2013. However, in the past few months the company's stock is in rebuilding mode and expected to appreciate nicely towards fair value.

Being one of the oldest and most recognizable brand names in the U.S., Western Union commands a value of about $1.5B, which is about 12% of the current market cap, according to Brand Directory. The company also enjoys a huge scale advantage over its rivals. WU handles four times more transaction volume than its nearest competitor, MoneyGram (NASDAQ:MGI), and can take aggressive pricing actions to maintain or even grow market share because of its sheer size and financial position. The money transfer company generally maintains healthy FCF margins of close to 20%. It has also been doing an impressive job enhancing shareholder value. The company recently came up with a $750 million share buyback and 25% increase in dividends. What is even more impressive is, since its IPO, the company has bought 21% of its stocks and the dividend has grown by 3800%. Additionally, the company has made some very good acquisitions over the past few years. To expand its online segment, Western Union acquired its two largest agents in Europe, Travelex for its B2B segment and eBillMe. Such quality acquisitions will help the company to fuel future growth. Western Union is working well to expand its e-commerce segment, which gives it the power to out-price other small competitors online.

Icahn Enterprises (NASDAQ:IEP) is a diversified holding company with subsidiaries operating in various industries including investment, automotive, energy, gaming, railcar, food packaging, metals, real estate and home fashion. Since 2000, the company's unit has increased by 1,003%, or 20% annually compared to the annual rates of return of 2%, 4% and 6%, respectively for the S&P 500, Dow Jones Industrial and Russell 2000.

Mr. Icahn himself owns about 91% of IEP's units outstanding, so investors can be assured that their interests are directly aligned with those of Mr. Icahn. One more thing that makes the stock impressive is that Mr. Icahn has the acumen to use the stock as currency, like he did in March this year. When Mr. Icahn believes the stocks are overvalued, or when he wants more cash to buy assets, IEP can tender shares in a public offering. Mr. Icahn can also buy the shares back if he feels prices are too low in relation to underlying value. Therefore, investors can be assured of the long-term shareholder value through prudent use of capital allocation.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: Black Coral Research is a team of writers who provide unique perspective to help inspire investors. This article was written Aman Jain, one of our Senior Analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Black Coral Research is not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes. Investing involves risk, including the loss of principal. Readers are solely responsible for their own investment decisions.

Source: 3 Financial Stocks With Dividend Yields Greater Than 3% And Room To Grow Payout Ratios