U.S. Bancorp: A 5.5% Yielding Buffett Style Table-Pounding Buy

Apr. 08, 2023 7:00 AM ETU.S. Bancorp (USB) StockUSB176 Comments

Summary

  • The regional banking crisis has caused even the highest quality financials to crash.
  • USB is down 21% in the last three weeks, despite being the largest and considered by some the strongest regional bank in America.
  • USB's business is nothing like high risk regional banks. It's an A-rated bank with AA-deposit safety.
  • USB's excellent management team is as battle tested as they come, including a CEO that's been with the bank for 37 years and was CFO during the Great Financial Crisis.
  • USB is trading at 7X earnings, a 45% historical discount, and offers a 5.5% very safe yield and nearly 100% upside to fair value. It could deliver 135% returns within three years, and 317% within six years. Long-term 13% risk-adjusted returns make this Buffett bank a table-pounding buy.
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US Bank ATM and branch

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This article was coproduced with Dividend Sensei.

Warren Buffett famously said to be "greedy when others are fearful." In the last few weeks, we've seen the second biggest two-week crash in regional banking history.

A 28% plunge that was

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This article was written by

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Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, along with HOYA Capital, lead the investing group iREIT®+HOYA Capital. The service covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President.

Note: Brad is also related to Nicholas Thomas who contributes to Seeking Alpha.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Dividend Sensei owns stock via SCHD.

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