In this article, we will be taking a look at 10 financial services dividend stocks with over 4% yield. To skip our detailed analysis of the financial services sector, you can go directly to see the 5 Financial Services Dividend Stocks with Over 4% Yield.
Like every other sector, the financial services sector is one that was hard-hit by the pandemic. However, unlike some sectors, it is also one that has managed to bounce back in 2021 with an even more promising outlook. As the pandemic rages on but vaccination production and distribution begins to counter it, and global markets and the economy go through a gradual and phased but nonetheless strong reopening and recovery, financial services stocks like JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), and Wells Fargo & Company (NYSE: WFC) begin to retake the stage. After all, despite the pandemic hitting the economy with a vengeance, there is still hope in the fact that the global financial services industry and market are expected to grow at a compound annual growth rate of 6% until the year 2025.
To substantiate the above claim, we can look at investor sentiment towards banking and finance stocks so far in 2021. According to the Wall Street Journal as of this May, with the economy recovering and reopening, investors are itching to get their hands on a share of the ensuing profits. To get at these said profits, thus, investors are looking at bank stocks, and steadily pouring money into them. As of this May, about $32 billion had already been poured into broad financial stocks, thus setting a full-year record when we weren't even halfway through the year. Resultantly, banking and finance stocks were said to have witnessed their best year on record, when compared to the benchmark S&P 500 index.
While the market at large was continuing to flounder in light of the pandemic and its merciless spread across the globe, banking and financial services stocks in general managed to outperform. American stocks were reportedly falling in mid-May, while the KBW Nasdaq Bank Index was up 35% even then, for instance. And while the positive performance of financial services stocks in the US at least may not mean that the economy in general is also going to follow suit, it still illuminates the path the recovery. The recovery itself is one that is heavily sponsored and upheld by the government itself.
S&P Global Market Intelligence in a COVID-19 Impact and Recovery report on the financial services sector has, for instance, mentioned that government stimulus programs have managed to protect the sector and the economy at large for the most part. As such, it can be safely stated that all hope may not yet be lost where the financial services sector is concerned, especially for investors interested in picking up the next best bank stock.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let's look at the 10 financial services dividend stocks with over 4% yield.
Our Methodology
We have selected small-cap dividend stocks part of the Russell 2000 index and also among the most popular stocks that hedge funds are investing in today, based on Insider Monkey's tracked data of about 866 hedge funds. These stocks have mostly positive analysts' ratings and strong fundamentals as well. Finally, the stocks have been ranked from the lowest to the highest dividend yield, and we have also mentioned the yields and number of hedge fund holders for each stock added to our list below.
Financial Services Dividend Stocks with Over 4% Yield
Number of Hedge Fund Holders: 15Dividend Yield: 4.4%
Safety Insurance Group, Inc. (NASDAQ: SAFT) is a provider of private passenger and commercial automobile and homeowner insurance primarily in the US. The company ranks 10th on our list of financial services dividend stocks with over 4% yield and its policies provide customers with coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured or insured car's passengers, and other similar facilities.
In the second quarter of 2021, Safety Insurance Group, Inc. (NASDAQ: SAFT) had an EPS of $2.49. The company's revenue was $222.88 million and beat the previous quarter's revenue of $221.91 million. Safety Insurance Group, Inc. (NASDAQ: SAFT) has gained 7.18% in the past 6 months and 6.20% year to date.
By the end of the first quarter of 2021, 15 hedge funds out of the 866 tracked by Insider Monkey held stakes in Safety Insurance Group, Inc. (NASDAQ: SAFT) worth roughly $43.6 million. This is compared to 12 hedge funds in the previous quarter with a total stake value of approximately $35.6 million.
Number of Hedge Fund Holders: 13Dividend Yield: 4.4%
Universal Insurance Holdings, Inc. (NYSE: UVE) is an integrated insurance holding company based in the US. It develops and underwrites insurance products for personal residential insurance and ranks 9th on our list of financial services dividend stocks with over 4% yield.
This July, Universal Insurance Holdings, Inc. (NYSE: UVE) affirmed its 2021 annualized return on average equity view within the range of 17-19% and also affirmed its EPS outlook of $2.75-$3.
In the second quarter of 2021, Universal Insurance Holdings, Inc. (NYSE: UVE) had an EPS of $0.65, beating estimates by $0.13. The company's revenue of $279.18 million was up 10.48% year over year and beat estimates by $6.28 million. Universal Insurance Holdings, Inc. (NYSE: UVE) has gained 0.71% in the past 6 months.
By the end of the first quarter of 2021, 13 hedge funds out of the 866 tracked by Insider Monkey held stakes in Universal Insurance Holdings, Inc. (NYSE: UVE) worth roughly $32.8 million. This is compared to 14 hedge funds in the previous quarter with a total stake value of approximately $36.4 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), and Wells Fargo & Company (NYSE: WFC), Universal Insurance Holdings, Inc. (NYSE: UVE) is a good stock to invest in.
Number of Hedge Fund Holders: 3Dividend Yield: 4.47%
Citizens & Northern Corporation (NASDAQ: CZNC), the bank holding company for Citizens & Northern Bank, provides a range of banking and mortgage services to individual and corporate customers in the US. The company ranks 8th on our list of financial services dividend stocks with over 4% yield and is based in Pennsylvania.
Last year in September, Piper Sandler analyst Casey Orr Whitman upgraded shares of Citizens & Northern Corporation (NASDAQ: CZNC) from Neutral to Overweight. The analyst also placed a $20 price target on the shares.
In the second quarter of 2021, Citizens & Northern Corporation (NASDAQ: CZNC) had an EPS of $0.44, missing estimates by $0.04. The company's revenue of $25.25 million was up 26.18% year over year and also missed estimates by $0.78 million. Citizens & Northern Corporation (NASDAQ: CZNC) has gained 21.55% in the past 6 months and 23.90% year to date.
By the end of the first quarter of 2021, 3 hedge funds out of the 866 tracked by Insider Monkey held stakes in Citizens & Northern Corporation (NASDAQ: CZNC) worth roughly $4 million. This is compared to 4 hedge funds in the previous quarter with a total stake value of approximately $4.8 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), and Wells Fargo & Company (NYSE: WFC), Citizens & Northern Corporation (NASDAQ: CZNC) is a good stock to invest in.
7. The Bank of N.T. Butterfield & Son Limited (NYSE: NTB)
Number of Hedge Fund Holders: 17Dividend Yield: 5.1%
The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) is a provider of community, commercial, and private banking services to individuals and small or medium-sized businesses. The company ranks 7th on our list of financial services dividend stocks with over 4% yield and accepts retail and corporate checking, savings, term, and interest-bearing and non-interest-bearing deposits, alongside deposit certificates.
This April, Citi analyst Arren Cyganovich raised his price target on shares of The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) from $35 to $39. The analyst also reiterated a Neutral rating on The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) shares.
In the second quarter of 2021, The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) had an EPS of $0.80, in line with estimates. The company's revenue of $123.54 million was up 2.27% year over year and beat estimates by $0.78 million. The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) has gained 2.82% in the past 6 months and 10.61% year to date.
By the end of the first quarter of 2021, 17 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) worth roughly $88.6 million. This is compared to 16 hedge funds in the previous quarter with a total stake value of approximately $83.3 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), and Wells Fargo & Company (NYSE: WFC), The Bank of N.T. Butterfield & Son Limited (NYSE: NTB) is a good stock to invest in.
6. Banco Latinoamericano de Comercio Exterior, S.A (NYSE: BLX)
Number of Hedge Fund Holders: N/ADividend Yield: 5.8%
Banco Latinoamericano de Comercio Exterior, S.A (NYSE: BLX) is a multinational bank engaging in the financing of foreign trade in Latin America and the Caribbean. The company operates through its Commercial and Treasury segments and ranks 6th on our list of financial services dividend stocks with over 4% yield.
In the second quarter of 2021, Banco Latinoamericano de Comercio Exterior, S.A (NYSE: BLX) had an EPS of $0.36. The company's revenue of $25.6 million was up 28.6% year over year and beat the previous quarter's revenue of $21.96 million. Banco Latinoamericano de Comercio Exterior, S.A (NYSE: BLX) has gained 8.44% in the past 6 months and 9.07% year to date.
Like JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Morgan Stanley (NYSE: MS), and Wells Fargo & Company (NYSE: WFC), Banco Latinoamericano de Comercio Exterior, S.A (NYSE: BLX) is a good stock to invest in.
