The Top US Regional Banks 2020

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The Top Regional Winners in the US listed in the Global Finance magazine’s The World’s Best Banks 2020 are shown the table below. These banks are the top banks in the respective region. For example, the Great Lakes region includes states of  Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin. Minneapolis-based US Bancorp(USB) is the winner in this region. Truist is the top bank in the Southeast region which includes the state of Georgia.

Truist was formed by the merge of Suntrust and BB&T banks.

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Note: The name Truist is misspelled in the above table.

Source: World’s Best Banks 2020: US Regional Banks, Global Finance

The tickers of the above banks are:

  • Union Bank (UNB)
  • Citizens Bank (CFG)
  • Zions Bancorp (ZION)
  • US Bancorp(USB)
  • Truist Corp (TFC)

Disclosure: Long USB

UK Dividends Declined by 57% in Second Quarter

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The UK is one of the top equity markets for dividends. Traditionally British firms have a dividend yield that is substantially higher than their US peers For instance, the dividend yield on the FTSE 100 at the end of June was 4.81%. This is more than double that of the S&P 500 rate which is just under 2%. However the coronavirus pandemic and the economic recession it triggered has led to many British companies slashing or suspending dividend payments. According to a recent report called the UK Dividend Monitor by Link Group the dividends have plunged by 57% in the second quarter.

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Source: UK Dividend Monitor Q2, 2020, Link Group

Below is an excerpt from an article at Citywire on this topic:

In the second quarter, 176 companies cancelled payouts and 30 cut them, representing three-quarters of those paying in the period. Payouts fell by £22bn to £16.1bn on a headline basis and by £16.4bn to £16bn on an underlying basis when special dividends were stripped out.

Payments from FTSE 100 stocks fell 45% while those from UK ‘mid-cap’ companies listed on the FTSE 250 dropped 76%. The cuts dwarfed those seen in the aftermath of the global financial crisis in 2008, when just two-fifths of companies cut or cancelled dividends.

While the second quarter dividend decline is the biggest on record, Link’s estimates suggest little sign of improvement for the rest of this year.

The report estimated that in a best-case scenario, dividends would fall 39% to £60.5bn on an underlying basis this year, or 45% when special dividends were factored in. In Link’s worst-case scenario, dividends will fall 49% on a headline basis and 43% to £56.3bn on an underlying basis.

Source: UK dividends crash 57% as coronavirus takes toll, Citywire

This is not surprising since some of the major dividend payers have cut dividends. Banks for example have been forced to suspend dividend payments by the Bank of England. So Barclays (BCS), HSBC (HSBC), Lloyds Banking Group (LYG), Royal Bank of Scotland (RBS) and Standard Chartered (SCBFY) have suspended dividends.

Other companies that cut dividends include oil major BP PLC(BP) which axed its payment by 50% earlier this month. This is the first time the company has reduced payments in a decade.

From an investment perspective, income investors can avoid British banks for now. Other firms should return to their normal payouts once the current crisis ends.

Disclosure: Long LYG

Comparing the Returns of Gold, Stocks and Bonds by Decade

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Gold has had an excellent run so far this year. The yellow metal is up over 28% year-to-date as investors pile into it as a hedge against risky assets and uncertainties brought by Covid-19.  In general, gold as an asset class performs well when stocks and bonds do not.

I recently across an article by Matthew A. Young at Young Investments where he discussed the performance of gold over stocks and bonds in the past few decades. From the article:

Like many financial assets that have risen over the long run, the 50-year price explosion in gold hasn’t been a straight line. Gold has compounded at 8.5% since August 1971, which compares favorably to stocks and bonds; but as the table below shows, gold has also experienced long dry spells.

The 1970s were gold’s best decade, with the price compounding at more than 35%. Over the next two decades, gold was down in price. During the 2000s, gold prices soared again, rising at a compounded annual rate of over 14%. During the 2010s, gold didn’t perform as well as it did during the 2000s, but it kept pace with inflation and edged out bonds.

 

Source: July 2020 Client Letter, Young Investments

The above table clearly shows gold is an important asset to own as its performance is inversely related to stocks and bonds for the most part.

Related ETF:

  • SPDR Gold Trust (GLD)

Disclosure: No Positions

Some of The World’s Longest Serving Leaders: Infographic

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The following infographic shows of the world’s longest leaders. After Ukraine had a color revolution a few years ago, protests are ongoing in Belarus to remove the dictator Alexander Lukashenko who has been in power for more than 26 years. President Emomali Rahmon of Tajikistan assumed office in 1994. Among the leaders showing in the chart, President Trump has been in office the shortest duration.Many Amerians hope that the maximum time he stays in the White House is 4 years. 🙂

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Source: 26 Years Of Lukashenka…And Counting, RFE/RL Infographics