Market Overview

These Financial Stocks Are on Fire!

While 2011 was a dismal year for financial stocks, the market rally in 2012 has been led by a number of beaten down financial names. If the rally is going to continue in the second quarter, it is very likely that financials will continued to outperform. Below, Benzinga looks at six of the top performing financial stocks so far in 2012.

AIG (NYSE: AIG) - This company will always be notorious for its role in imploding the global economy, but the new-look AIG might just make a solid investment - and its been a great trade in 2012. Shares have risen nearly 42% year-to-date, and the stock has added more than 8% over the last month with most of the gains coming in recent weeks.

Bank of America (NYSE: BAC) - In the great financial rally of 2012, the worst banks and brokers have actually had the best performing stocks given how beaten down they had become. In this "dash for trash," Bank of America is the leader. BAC shares are up an almost unreal 66% in 2012 and were last trading at $9.24. While this is a risky name given the company's operating problems and legacy mortgage issues, shares could rise as high as the $15 or $16 level. Book value per share is currently $20.09, so the stock continues to trade at a huge discount. Remember, however, that BAC could just as easily be trading at $3 or less in a couple of years.

Capital One Financial (NSYE:COF) - This company is known for its memorable barbarian commercials and its stock has become pretty hot in 2012 as well. Shares have added a very healthy 32% year-to-date, and are sitting near new 52-week highs. At current levels, COF also offers up a dividend yield of 0.36% - as paltry as that is, its still better than nothing.

Discover Financial Services (NYSE: DFS) - Discover is kind of the red-headed step-child of the credit card business. Nevertheless, the stock has outperformed higher quality names such as Visa (NYSE: V) and MasterCard (NYSE: MA) in 2012. DFS shares have risen nearly 38% year-to-date, and have tacked on more than 8% over the last month. The stock is currently yielding 1.21%.

JP Morgan (NYSE: JPM) - As banks and brokers go, JPM is viewed as one of the highest quality franchises by investors. In general, the stock is viewed as being quite a bit safer than Bank of America, for example. After taking a beating in 2011, JPM has rebounded strongly and is up more than 33% in 2012. Nevertheless, shares are still lower over the last 52-weeks, and any financial stock should be considered a risky bet.

SunTrust Banks (NYSE: STI) - This regional bank was also punished in 2011, but has bounced back nicely. Year-to-date, shares have risen nearly 36% to $24.06 and the stock has added more than 8% in the last month. At current levels, STI yields 0.83%. Although still risky, regional banks such as SunTrust have some decided advantages over their Wall Street counterparts and should be included in any diversified portfolio of financial stocks.

Posted-In: Long Ideas Dividends Technicals Intraday Update Movers Trading Ideas Best of Benzinga

 

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