11 bank stocks trading at low valuations, even after Trump bump

Amazon.com, Inc. , headquartered in Seattle, Washington, is the world's largest online retailer and marketplace. The company engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores. With a market cap of $2.2 trillion, its products include books, music, computers, electronics, and numerous other products. Amazon offers personalized shopping services, web-based credit card payment, and direct shipping to customers. It also operates a cloud platform offering services globally.

Shares of this e-commerce giant have outperformed the broader market considerably over the past year. AMZN has gained 44.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.9%. In 2024, AMZN stock is up 36.1%, surpassing the SPX’s 25.8% rise on a YTD basis.

Narrowing the focus, AMZN has lagged behind the ProShares Online Retail ETF . The exchange-traded fund has gained about 48.8% over the past year. However, AMZN’s gains on a YTD basis outshine the ETF’s 26.5% returns over the same time frame.

Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Vanguard Value ETF (VTV) is a passively managed exchange traded fund launched on 01/26/2004.

The fund is sponsored by Vanguard. It has amassed assets over $132.41 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.21%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 23.20% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 3.41% of total assets, followed by Berkshire Hathaway Inc (BRK/B) and Jpmorgan Chase & Co (JPM).

The top 10 holdings account for about 6.64% of total assets under management.

Performance and Risk

VTV seeks to match the performance of the CRSP U.S. Large Cap Value Index before fees and expenses. The CRSP U.S. Large Cap Value Index measures the investment return of large-capitalization value stocks.

The ETF has added about 21.81% so far this year and is up about 33.06% in the last one year (as of 11/12/2024). In the past 52-week period, it has traded between $137.55 and $179.17.

The ETF has a beta of 0.87 and standard deviation of 14.13% for the trailing three-year period, making it a medium risk choice in the space. With about 344 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VTV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 1000 Value ETF (IWD) and the Schwab U.S. Dividend Equity ETF (SCHD) track a similar index. While iShares Russell 1000 Value ETF has $61.57 billion in assets, Schwab U.S. Dividend Equity ETF has $65.90 billion. IWD has an expense ratio of 0.19% and SCHD charges 0.06%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Zacks Investment Research

President-elect Donald Trump‘s pro-business policies could potentially drive the stock market to unprecedented levels, according to Jeremy Siegel, a finance professor at the Wharton School of the University of Pennsylvania.

What Happened: Siegel, speaking on CNBC’s “Squawk Box,” suggested that Trump’s policies could have a significant impact on the stock market. “President-elect Trump is the most pro-stock market president we have had in our history,” Siegel said.

“He measured his success in his first term by how well the stock market did. You know, it seems to me very unlikely he’s going to implement policies that are going to be bad for the stock market,” Siegel said.

Following Trump’s election win, the market has already experienced a surge, with investors banking on his pledges of tax cuts and deregulation to drive growth and benefit-risk assets.

See Also: Bitcoin Surges Past $80,000 Milestone For First Time On Optimism Over Trump

Why It Matters: The S&P 500 tracked by SPDR S&P 500 ETF rose by 4.66% last week, marking its best week since November 2023, and trading above 6,000 for the first time. The Dow Jones Industrial Average represented by the SPDR Dow Jones Industrial Average ETF Trust also reached a new milestone of 44,000 post-election.

Stocks after Trump’s victory, including Tesla Inc and major banks like JPMorgan Chase & Co and Wells Fargo & Co , experienced significant gains. Additionally, Bitcoin continued to hit record highs as traders anticipated looser regulations under Trump.

As the era of the “Trump trade” draws to a close, the market’s attention is shifting toward the potential impacts of Trump’s policy priorities on investments. His promises of lower corporate taxes and deregulation are seen as beneficial for the economy and stock prices, while other pledges, such as immigration clampdowns and high tariffs, are viewed as potential economic obstacles.

Read Next:

• Warren Buffett’s Apple Stake Reduction Spurs $97B Cash Surge—Analysts Speculate This Could Be The Reason Behind Berkshire Hathaway’s Massive Cash Pile

Image via Wikimedia Commons

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The CNN Money Fear and Greed index showed further improvement in the overall market sentiment, while the index remained in the “Greed” zone on Monday.

U.S. stocks settled higher on Monday, with the Dow Jones jumping more than 300 points to settle above the 44,000 level for the first time, extending gains following the election of Donald Trump as the 47th U.S. president.

Wall Street recorded gains last week, with the S&P 500 surging 4.66% last week and the Dow gaining 4.61%. The Nasdaq, meanwhile, jumped 5.74% during the week.

Tesla, Inc. shares jumped around 9% on Monday, extending gains following the U.S. presidential election. Shares of big banks, including, JPMorgan Chase , Goldman Sachs , Bank of America , and Citigroup all closed higher on Monday.

Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, financials, and industrials stocks recording the biggest gains on Monday. However, information technology and real estate stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 304 points to 44,293.13 on Monday. The S&P 500 gained 0.10% to 6,001.35, while the Nasdaq Composite rose 0.06% to close at 19,298.76 during Monday's session.

Investors are awaiting earnings results from Tyson Foods, Inc. , The Home Depot, Inc. , and Occidental Petroleum Corporation today.

What is CNN Business Fear & Greed Index?

At a current reading of 67.9, the index remained in the “Greed” zone on Monday, versus a prior reading of 62.7.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

Read Next:

• Jim Cramer: This Tech Stock Can ‘Go To 160,’ Recommends Buying Domino’s Pizza

Photo courtesy: Shutterstock

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.