Given the downdraft in bank stock prices this year, some of the biggest financial companies in the U.S. are all of the sudden offering sky high dividend yields.
Those lofty payouts are attractive in absolute terms, and even when compared with prevailing Treasury yields.
Even Wells Fargo yields about 2.5%, far above what banks pay on savings or checking accounts.
Q3 bank earnings playbook All eyes turn to bank earnings for clues on slowing U.S. economy after Dimon's recession warning Treasury yields in some instances may be higher, but the "volatility of bank dividend yields have traditionally been far less than that of Treasuries," Evercore ISI wrote.
As a result, today's above-average financial dividend yields "present an opportunity - particularly given banks' still-solid earnings power (despite eventual credit normalization), robust capital levels, and historical dividend progression," Evercore ISI said.