Four Dividend-paying Financial Stocks to Buy Despite Risks

06/27/2025

Four Dividend-paying financial stocks to buy despite risks feature a global investment bank and three regional ones.
The four dividend-paying financial stocks to buy show how the banking industry has advanced technologically since America came into existence. A well-known fan of investing in financial services back then was Benjamin Franklin, a polymath Founding Father of the United States whose occupations included diplomat, inventor, printer, publisher and diversified investor in rental properties, government bonds, bank stocks and bank accounts in three countries.
Mark Skousen, PhD, a descendent of Franklin, described the investing habits of his famous relative in a new book, “The Greatest American.” Franklin, also a drafter and signer of the Declaration of Independence, and the nation’s first postmaster general, was credited with giving sage advice about saving and investing.

Mark Skousen leads the Forecasts & Strategies newsletter.
“In the good times, he saved money and invested wisely, so that when the bad times came, he was able to weather the storm,” wrote Skousen, about his ancestor. As a Presidential Fellow of economics at Chapman University and head of the Forecasts & Strategies investment newsletter, Skousen cited a 1772 banking crisis in London when Franklin survived by having his funds in two conservative banking houses that withstood the "bank run.”
“Being out of debt myself, my credit could not be shaken by any run upon me,” Franklin wrote home at the time.
Four Dividend-paying Financial Stocks to Buy Despite Risks: TFC
Charlotte, North Carolina-based Truist Financial Corp. (NYSE: TFC) recently received an upgraded recommendation to a buy from Citi Research analysts, who wrote that the company has "too much value" on the table to ignore, especially with stock buybacks and improving fundamentals. The stock trades at a discount to Citi's other financial services companies, creating an attractive entry point, according to a new research report.
Additionally, Citi Research forecasts an increase in buy backs of its shares due to the company's strong capital position and cheap share price relative to intrinsic value. The result is Citi Research boosted its share price target on TFC to $55 from $44.
Citi Research rates the shares of Truist Financial as a buy, partly on the strength of delivering positive operating leverage in 2025 and 2026 with its management having turned the corner on expense discipline, according to the investment bank's latest research note on the company.
"We see additional upside from strong capital position creating ability to buy back shares at a significant discount to intrinsic value," Citi Research wrote. "With the stock trading at a discount on our implied cost of equity metric relative to peers, we like the risk/reward with now as an attractive point."
The financial services company offers a full range of consumer and commercial banking, securities brokerage, asset management, mortgage, and other services. As of December 31, 2024, Truist had assets of $527 billion and an annual dividend yield of 4.88%.

Chart courtesy of www.stockcharts.com.

Four Dividend-paying Financial Stocks to Buy Despite Risks: GS
Good financial stocks proved to be successful investments in Franklin’s time as well as now. Skousen is recommending global investment bank Goldman Sachs (NYSE: GS) in his Forecasts & Strategies investment newsletter.
Goldman Sachs has topped $635 and has a double-digit-percentage profit of 38.69% in the past year and 10.48% so far this year. The company is predicted to post earnings per share of $9.69, indicating a 12.4% growth compared to the equivalent quarter last year. It also is selling at less than 12 times earnings and offers a current dividend yield of 1.74%.
Goldman Sachs is one of five dividend-paying stocks that are recommended in the Flying Five portfolio of his Forecasts & Strategies investment newsletter. The Flying Five consists of stocks that pay good dividends and trade at modest valuations. Skousen updates the stocks in the August issue of his newsletter. Goldman Sachs may turn out to be a keeper when Skousen updates his choices in that portfolio within the next month.
Citigroup also likes Goldman Sachs and rates the stock as a “strong candidate” for a secular re-rating due to its ongoing shift to a structurally higher return on equity (ROE), delivering superior and durable earnings per share (EPS) growth, best-in-class origination capabilities, private credit and wealth management. Plus, Citigroup wrote that Goldman Sachs has better than perceived resiliency in capital markets.
In addition, Citigroup wrote that Goldman Sachs has a proven DNA to adapt to a changing operating environment, and a course correction that creates a strong combination of scale and flexibility.
Chart courtesy of www.stockcharts.com.
Four Financial Stocks to Buy Amid Risks: Portia Capital's Chief
A money manager who also likes the outlook for Goldman Sachs is Michelle Connell, who heads Portia Capital Management in Dallas. She cited the following as key reasons.
Large push into AI: Goldman Sachs is using AI assistants internally in a big way. Currently, 10,000 employees are already utilizing AI technology to improve productivity and profitability. Expect to see its use balloon.
Returning to Special Purpose Acquisition Companies (SPACs): After stepping away from SPACs in 2022, Goldman's return to them is seen as a means of giving the bank the flexibility to meet the needs of the quick evolution of the technology and biotech industries. Because SPAC's use an initial public offering (IPO) to raise money and then acquire private companies, they are seen as a faster way to take a company public and allow the wealthy to invest. As the targeted companies are not known at the onset, SPACs are also riskier.
Expansion in North Dallas: As a current resident of North Texas, Connell said she finds it interesting that Goldman has announced a new 800,000 square-foot campus being built in Dallas. Like several other large financial institutions, Goldman Sachs is attracted to the growth in the Texas population, as well as the region's lower cost of doing business.
The estimated completion date for the new facility is 2028. Local employee head count is expected to increase significantly from its current level of 4500 employees, Connell continued.
Michelle Connell owns and is chief investment officer of Portia Capital Management.
Four Dividend-paying Financial Stocks to Buy Despite Risks: PNC
Pittsburgh-based PNC Financial Services Group Inc. (NYSE: PNC) ranks as the seventh-largest banking company in the United States and offers a current dividend yield of 3.46%. PNC is recommended by Jim Woods in the Income Multipliers Portfolio of his Investing Edge newsletter. Woods also is a former U.S. Army special forces leader who heads the Crypto and Commodities Trader advisory service that is aimed at producing quick profits from both stocks and options, as well as certain cryptocurrencies. He has amassed 30-plus years of experience in the markets.
With that kind of background, Woods is willing to focus on either long-term or short-term investments, depending on the goals and risk tolerance of each investor. He identifies companies that offer both growth or stability and dividend payouts.
Skousen and Jim Woods, a seasoned stock picker, team up to head the Fast Money Alert trading service. The duo collaborate on recommending Fast Money Alert portfolio positions that include both stocks and related options.
Jim Woods heads the Investing Edge newsletter and Fast Money Alert.
Portia Capital Management's Connell counseled that PNC has been a consistent dividend payer even through financial crises, with its dividend yield growing 7% annually during the past five years.
"With over $500 billion in assets, PNC is considered one of the largest regional banking groups in the United States," Connell continued. "The bank is highly diversified across business segments, including investment banking and asset management. Their competitors cannot say the same."
PNC plans to continue its geographical expansion during the next five years, Connell told me. The bank's presence, formally focused on the East Coast, has grown to include the West Coast and the Southeast, she added.
In the next five years, PNC plans to invest another $1.5 billion to open 200 new branches and renovate 1,400 branches. The result will be greater brand recognition and market share, Connell added.
PNC has a healthy loan to deposit ratio of 75%. In comparison, 80%-plus is the average for regional banks, Connell opined. The bank also is adept at keeping its expenses under control.
"One of the strongest reasons for my support of the stock is that PNC has been returning over 50% of its earnings to a shareholders, either in the form of dividends or buybacks," Connell told me. "Another reason is its expansion strategy."
Currently, PNC trades at almost 1.4 times its book value. Since it has traded in a range of 1.1 to 1.7 times its book value in the past, she views its valuation as fair.
"I think dollar cost averaging or acquisition of shares on a pullback would make sense," Connell concluded.

Chart courtesy of www.stockcharts.com.
Four Dividend-paying Financial Stocks to Buy Despite Risks: WFC
San Francisco-based Wells Fargo Corp. (NYSE: WFC) offers a 2.01% current dividend yield and is rated as a BofA Global Research “buy.” One reason is that the Federal Reserve recently lifted the 2018 asset-cap to end a requirement that Wells Fargo incur an asset growth restriction from a 2018 enforcement action, according to BofA Global Research.
The Federal Reserve found that dividend-paying Wells Fargo met all the conditions for removal of the growth restriction, noting “other provisions in the 2018 enforcement action will remain in place until the bank satisfies the requirements for their termination.” The 2018 consent order, following a first third party review, stated the Fed could remove the asset cap prior to conducting a second sustainability review.
“Removal of the asset-cap is a positive catalyst, both fundamentally and for stock valuation,” BofA Global Research wrote.
BofA opined that investors now can focus of the bank management’s aim to deliver Return on Tangible Common Equity (ROTCE) in 2026 and 2027 between 14.5% and 15.8%. When applying a 2x P/Tangible Book Value (TBV) to BofA's mid-2026 TBV implies a valuation per share around $90 or ~11.5x 2027 estimated EPS, which the investment bank sees as achievable in the next 12 months.
"We see potential for a new pool of investors who had been fatigued by the regulatory overhang to step-in given WFC's idiosyncratic growth story, room for efficiency gains in the consumer bank and potential for capital relief," BofA wrote. "We raise PO to $90 from $83."
Chart courtesy of www.stockcharts.com.
Four Dividend-paying Financial Stocks to Buy Despite Risks: War Worries
Israel and Iran began a ceasefire at the urging of President Trump, after firing missiles at each other due to the latter's advances in gaining nuclear capability that could be used to cause massive harm if channeled toward military purposes to attack its neighboring nation and its citizens. Israel's leaders claimed that Iran was planning to provide nuclear weapons to its terrorist proxies in the Middle East.
The United States bombed three nuclear development sights in Iran in an attempt to thwart development of enriched that could be used to deploy nuclear weapons. The Republican-led U.S. Senate rejected a Democratic-driven plan to block President Donald Trump from using further military force against Iran, hours after the president said on Friday, June 27, that he would not rule out further bombing. The Senate voted 53 to 47 to defeat a war powers resolution that would have required congressional approval for more military action against Iran.
Meanwhile, war continues to rage in Ukraine as Russia intensifies its attacks against its neighboring nation. Investors can take extra protection for potential fallout from the wars by holding shares in the four dividend-paying financial stocks despite risks.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

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