These Two Banks Are Looking Solid

Banking stocks have staged a comeback in recent weeks. And it's about time. They took it on the chin for a long time, arguably the most overlooked of the "value" stocks. But even with the recent rebound, one highly regarded watcher of bank stocks thinks they seem appealing. "There's a whole litany of stocks you can look at," says Dale Jacobs of Financial Investors, a New York money-management firm.

These stocks, with old-fashioned attributes such as profits and revenues, are a welcome contrast to the cash-burning dot-coms. One "excellent value" that Jacobs likes is FleetBoston Financial (FBF), whose shares have rebounded in recent weeks but still are down 15% this year. FleetBoston is as solid as Plymouth Rock, with a 23% return on equity in the first quarter, when profits climbed 51%, to $957 million, or $1.03 a share. That's up from $661 million, or 68 cents a share, a year ago. The company plans a $2 billion buyback, which should bring a further boost.

Jacobs is also high on Detroit's Comerica (CMA). "It's a good clean banking operation that has consistently reported strong earnings. They just continue to put their nose to the grindstone and produce solid, consistent results," says Jacobs. On Apr. 17, Comerica reported record first-quarter earnings of $178 million, or $1.10 a share, a 12% gain over the $159 million, or 98 cents, a year ago. Jacobs counsels patience: It may be a long time until stocks like these are back in style. But if you are betting on a return to value stocks, these are two names worth looking at.

Gene Marcial is on vacation and will return next week.

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