Financials may be my favorite sector for 2018; Regions Financial (RF), my top pick for aggressive investors, is a large regional bank located in the Southeast, suggests income expert Chuck Carlson, editor of DRIP Investor.
Rising interest rates should improve net interest margins, and a strong economy should spur loan demand. Regions Financial boosts its total-return prospects via a dividend yield of 2.1%.
The stock has done well in recent months but still trades at half the price it sported in 2006, before the financial crisis.
I remain a fan of banking stocks. I like the dividend-growth potential, above-market yields, and ample leverage to an improving economy and higher interest rates.
While Regions Financial represents a slightly more aggressive play in the group, I think these shares have the potential to handily beat the broad market.
While I don’t expect a move to the $30s over the next 12 months, I wouldn’t be surprised to see a move to the lower $20s from the current $17 per share.
Regions Financial has a direct-purchase plan whereby any investor may buy the first share and every share directly.
Disclosure: I own shares in Regions Financial.
Chuck Carlson is editor of the DRIP Investor.
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