Magazine article American Banker

KBW Lists Safe Haven Stocks

Magazine article American Banker

KBW Lists Safe Haven Stocks

Article excerpt

Byline: Alan Kline

The investment firm Keefe, Bruyette & Woods Inc. is advising investors to stop dumping their shares in Westamerica Bancorp.

In a research note Monday in which it identified 16 bank stocks as "safe havens," KBW called Westamerica, of San Rafael, Calif., one of the "gold-standard banks" on the West Coast, and said that "even the most recent negative economic sentiment should not derail the bank's consistent profitability."

Westamerica's shares have fallen nearly 20% since July 1, even though it reported solid second-quarter profit, pays a generous dividend and has what KBW says is "one of the strongest balance sheets" in its coverage universe.

"Given the recent sell-off," KBW said in its research note, "we consider the current stock price to be an attractive entry point for a quality name."

The banks KBW listed as safe havens are all community and regional banks that have several things in common: They offer attractive dividends, they have the authority to buy back shares and they have no ties to the government's Troubled Asset Relief Program.

"The stocks that we are highlighting in this note are not necessarily cheap stocks, but we believe these franchises can justify higher valuations given the returns they generate above their cost of equity," KBW analysts wrote.

Some, including Westamerica and United Bankshares Inc., were also singled out for their consistent performance throughout the economic downturn. …

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