If you invest in bank stocks, then you probably won't be surprised to hear that U.S. Bancorp (USB 0.55%) is one of the nation's best-run banks. And you don't just have to take my word for it, because a recent Wells Fargo (WFC 2.08%) presentation does an excellent job of showing just why this is the case.
The presentation, given by Wells Fargo CFO John Shrewsberry at the bank's annual investor day last week, offers a host of charts that show the multiple areas in which U.S. Bancorp has emerged at the top of the industry.
For example, take the chart below, which shows that U.S. Bancorp's book value and dividends per share have grown at a faster annualized rate over the past four years compared to Wells Fargo and the four other biggest banks in America:
Data source: Wells Fargo.
Or take this chart, which shows that U.S. Bancorp is the nation's most profitable big bank, generating a 17.4% return on tangible common equity last year compared to runner-up Wells Fargo's 13.9%:
Data source: Wells Fargo.
There's the one below as well, which looks at return on assets, a measure of profitability that excludes the impact from leverage:
Data source: Wells Fargo.
Finally, Wells Fargo included a chart that compared these six banks' efficiency ratios. This is calculated by dividing a bank's noninterest expenses by its net revenue, with a lower number being better than a higher number:
Data source: Wells Fargo.
To be clear, this doesn't necessarily mean that you should go out and buy U.S. Bancorp's stock today. I own it, and I think it's a great long-term investment. U.S. Bancorp's shares, however, don't come cheap. They currently trade for more than two times book value. The other five stocks in the charts trade for less than two times book value, and Citigroup's shares trade for a 20% discount to book value.
But you get what you pay for, as U.S. Bancorp's profitability isn't only the highest, but it's also the most consistent, as you can see in another chart included in Wells Fargo's presentation for its 2017 investor day:
Data source: Wells Fargo.
In sum, if you're looking for a bank stock to hold for the long term, you could do a lot worse than U.S. Bancorp. While its high valuation will likely muzzle significant short-term gains, the appreciation of its shares over the long term should make up for this.
