Business & Finance
Business and Finance
Business and Finance
Tue, July 27, 2010
Mon, July 26, 2010 
CHICAGO--([ BUSINESS WIRE ])--Today, Zacks Investment Ideas feature highlights Features: Banco de Chile (NYSE: [ BCH ]), Banco Macro S.A. (NYSE: [ BMA ]) and Bancolombia (NYSE: [ CIB ]).
3 Hot South-of-the-Border Bank Stocks
Forget American banks. They're so 2007.
While everyone is still obsessing over Goldman Sachs or Bank of America, the hottest financial stocks on the planet are south of the border in Brazil, Argentina, Colombia, Chile and Panama.
Not only do the big banks in Latin and South America have growth, they are also paying nice dividends to boot. Remember those? American banks used to pay dividends- back in the day.
As the middle class expands, demand for banking services from ATMs and branch services to small business loans and insurance increases which will fuel growth.
The story looks good for many of these banks in the coming quarters as the global recovery takes hold. 2010 and 2011 estimates are rising.
Why not diversify your portfolio with Latin American exposure?
3 Hot South of the Border Bank Stocks
- Banco de Chile
- Banco Macro S.A.
- Bancolombia
Banco de Chile (NYSE: [ BCH ]) is Chile's oldest bank, founded in 1860, and provides about 20% of the country's personal and business banking services.
You'll get the largest dividend of these three banking stocks with BCH as it currently yields 3.5%.
Analysts see big earnings growth in 2010 of 39.4% with 2 out of 5 estimates moving higher in the last 30 days and 1 in just the last week. Earnings per share are expected to be $5.16.
The company has surprised on earnings 2 out of the last 3 quarters and is scheduled to report earnings on Aug 3.
Is it cheap?
Banco de Chile has a forward P/E of 14.4, which is slightly over its peer average of 13.5. It is a Zacks #1 Rank (strong buy) stock.
The stock has been hot since the March 2009 lows and is now trading at a 5-year high.
Banco Macro S.A. (NYSE: [ BMA ]) is an Argentinean commercial bank with the largest private branch network in the country. It has a market cap of just 2 billion.
The dividend yield is a solid 2.7%.
Earnings per share growth is not expected to be as great as Banco Chile as analysts project 7% growth in 2010 and another 8.5% in 2011.
Still, it has shown consistency on earnings surprises over the prior 4 quarters, beating estimates every quarter by an average of 25%. It is expected to report earnings again on Aug 5.
Is it cheap?
Banco Marco is cheaper than its peers, trading with a forward P/E of just 10.1 compared to the peer average of 12.3.
This Zacks #2 Rank (buy) stock also has rebounded off the dark times of the financial crisis and is now trading near a 52-week high.
Bancolombia (NYSE: [ CIB ]) is the largest bank in Colombia. It controls 20% of personal and commercial business in Colombia and 30% in El Salvador. Since being listed on the NYSE in 1995, its assets have grown from $1.85 billion to $31.6 billion.
Bancolombia has a stellar record of raising its dividend payout every year since 2003, including even during the darkest days of 2008 and 2009. The current yield is 2.3%.
Growth is still on tap, as analysts expect earnings to rise 10.5% in 2010 and 24% in 2011.
Colombia is hot, both as a tourist and business destination, as the country has seen stabilization in its politics and its economy.
Is it cheap?
Bancolombia's stock is also hot, surging to record highs off the March 2009 lows. This has made the stock more expensive than its peers, trading at 16.5x forward estimates compared to 14.4 for its peers.
This Zacks #2 Rank (buy) is expected to report earnings on Aug 4. Its earnings surprise history has been mixed over the last 4 quarters but the most accurate estimate is showing an expected earnings surprise of over 27%.
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