Top Picks 2018: Regions Financial (RF)

01/02/2018 5:00 am EST

Focus: FINANCIALS

Charles Carlson

Editor, DRIP Investor

Financials may be my favorite sector for 2018; Regions Financial (RF), my top pick for aggressive investors, is a large regional bank located in the Southeast, suggests income expert Chuck Carlson, editor of DRIP Investor.

Rising interest rates should improve net interest margins, and a strong economy should spur loan demand. Regions Financial boosts its total-return prospects via a dividend yield of 2.1%.

The stock has done well in recent months but still trades at half the price it sported in 2006, before the financial crisis.

I remain a fan of banking stocks. I like the dividend-growth potential, above-market yields, and ample leverage to an improving economy and higher interest rates.

While Regions Financial represents a slightly more aggressive play in the group, I think these shares have the potential to handily beat the broad market.

While I don’t expect a move to the $30s over the next 12 months, I wouldn’t be surprised to see a move to the lower $20s from the current $17 per share.

Regions Financial has a direct-purchase plan whereby any investor may buy the first share and every share directly. Disclosure: I own shares in Regions Financial.

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