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Stock Strategist

U.S. Bancorp's Extending Its Advantage in 2014

We think the firm will continue to create significant value for shareholders.


We think the competitive advantages behind  U.S. Bancorp's (USB) narrow moat remain firmly in place and the firm will continue to create significant value for shareholders. We think management is not content to rest on its laurels, but rather is focused on continuing to build market share and deepen relationships with customers. Over the past six years, U.S. Bancorp has been investing in growth in order to have the scale necessary to deliver outstanding experiences for customers and outsize returns for shareholders. Having met its targets, U.S. Bancorp is positioning itself to continue to increase market share, which we think will lead to high returns and lower earnings volatility than competitors. We think the shares may be particularly attractive to income investors; U.S. Bancorp has been among the more aggressive banks in terms of capital return to shareholders, historically returning more than 70% of annual net income in the form of dividends and common stock repurchases.

U.S. Bancorp is a diversified financial services provider operating in 25 states in the Western and Northern United States. With $353 billion in assets, it is the fifth-largest commercial bank in the U.S., operating more than 3,000 offices and 5,000 ATMs in 25 states and generating approximately 45% of its revenue through fee-based businesses. The company is divided into four operating segments: wholesale banking and commercial real estate, consumer and small-business banking, wealth management and securities services, and payment services.

Dan Werner does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.