Are you looking to invest in the financial sector? If you are wondering what the top financial stocks to buy right now are, then you may want to consider some of the big banks. JPMorgan Chase and bank of America are the two biggest banking institutions in the US. While the banking sector has taken a hit because of the economic downturn brought about by the COVID crises, some banks have performed much better than the others. A lot regarding this outperformance has to do with investment banking and trading activities. Both these have the ability to offset the drop in commercial and retail banking revenues.
Bank of America’s Investment Banking Arm Had One Of Its Best Quarters
According to Bank of America’s Chief Financial Officer, Paul Donofrio, the bank had its second-best quarter in history as far as investment banking fees are concerned. The bank earned $1.8 billion in such fees during Q32020. Asset management fees were also up. While the overall net income was down on a year-on-year basis, it was up from $3.5 billion in Q22020 to $4.9 billion in Q32020. As the economy gradually opens up and progress on various vaccine trials happens, the overall sentiment and business climate are also beginning to look up. Low interest rates, however, do not help banks as they have witnessed NII compression. Bank of America was also no different. Its Net Interest Income has fallen to $10.24 billion in Q32020, down from $12.34 billion in Q32019.
Stock Performances of The Best Financial Stocks To Buy For 2020
Ultimately, it is about the returns that the best financial stocks to buy for 2020 have generated. Bank of America is up 33% since hitting a low in March. Currently, as of 2nd November 2020, Bank of America trades at a 3% dividend yield. JPMorgan Chase is up 26% over the same period but it currently trades at a 3.59% dividend yield.