Best Bank Stocks to Watch 2024

Brandie E Blackler
9 Min read

The best bank stocks to watch are a hot topic this year, 2024. 

The current state of bank stocks sees mild to extreme volatility, which can pose both threats and opportunities, depending on the appetite for risk of each individual investor.

What are considered to be the potentially best bank stocks to watch in 2024?

We take a look at these details regarding global bank stocks, along with more details relevant to this vertical. Keep reading to learn more.

Best Bank Stocks to Watch: Introduction

Despite experiencing some wild volatility in the final quarter of 2018, the US stock market has been enjoying an extended bull run in the years following the end of the financial crisis. 

In November 2019, the S&P 500 index had made back most of its losses around a year earlier and not only that but closed at a then-all-time high of 3.085,20, having risen all the way from a close of 682.55 back in March 2009. That's a remarkable increase in value of 352% in a little more than a decade.

Now, at the beginning of 2024, bank stocks are seeing some volatility after ongoing concerns with global inflation, potential recession fears and rising interest rates.

Are bank stocks still a valid option in the current economic climate in regards to both trading and investing? This is a question which can only be answered individually.

What are some given characteristics of bank stocks? Let's look at some advantages and disadvantages.

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Advantages and Disadvantages of Bank Stocks

As with any stock niche, there are advantages and disadvantages to investing or trading bank stocks - upsides and downsides.

Naturally, they will not work for all investment strategies and individuals. While bank stocks can be perceived generally as long-term investments, in times of volatility they may be suitable for short-term trading.

Let's review some of the advantages and disadvantages below:

Advantages of Bank Stocks:

  • Multiple Income Verticals: Banks, generally speaking, and hence bank stocks have a certain unique level of diversification. With two business functions, commercial banking and investment banking, both react differently to market conditions. Commercial banking focuses mainly on loans, receiving deposits, insurance, retirement and so on. Investment banking focuses more on wealth management, trading, Initial Public Offerings (IPOs), and equity underwriting. These two sub-niches react differently to market conditions, making the potential investment more versatile.
  • Benefit of Regulation: Given the influence of the banking industry on national and global economies, they are subject to heavy regulation. While regulation can also be seen as a risk factor with smaller or regional banks, the regulation does typically allow the shares of a given bank to remain more stable.

Disadvantages of Bank Stocks:

  • Cyclical Business Model: Simply put, banks are sensitive to recession as they are cyclical businesses. Given the commercial model of banks relies on customers spending and borrowing money, this poses a natural risk during times of recession.
  • Interest Rates: The primary profit vehicle of banks is to generate interest from their customers. When interest rates fall in the given economic climate, naturally banks make fewer profits which affects the stock price.

The Top 5 US Bank Stocks

US bank stocks will potentially always remain popular as they are more or less at the core of the global financial world, given various economic factors.

With the broad options of offerings such as financial services to consumers and small businesses, asset management, and financial transaction processing, the US has created a conducive environment in which to conduct such business, thanks to the accommodative monetary policy employed by the Federal Reserve.

Let's take a look at some of the main banks in the Dow Jones US bank index, to help us explore which are the best US bank stocks. The bank stocks with the highest weight in that particular bank's index are, unsurprisingly, some of the giants of the US banking sector.

These include:

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US Regional Bank Stocks

Naturally, it's not just the banking giants that have enjoyed healthy growth in their share prices over time. If we dig into the US banks with smaller market caps and look at the best regional bank stocks, this gives an additional overview of potential bank stocks to watch.

For example, if we focus on Southwest regional banks, First Financial Bankshares (#FFIN) has seen somewhat steady growth over a 5-year period. View the 5-year TradingView chart, below, to gain an idea of the long-term price fluctuations:

UK Bank Stocks

It has been a different story for UK bank stocks, given statistics.

While the US economy has been somewhat steady over time, the UK economic picture has been complicated by the looming results of Brexit.

While the direct economic impact so far is debatable, the uncertainty of the whole situation has served to make the UK a less attractive proposition.

London has long enjoyed a position as the financial centre of Europe, however, Brexit has created more turbulent times since its inauguration.

That said, let's list below some of the leading UK bank stocks:

Generally and technically speaking, it's important to consider the specific environment of the economic region in question when investing and trading bank stocks.

Through a period of global growth, there has been a marked difference in share-price performance between the big US banks and the big UK banks.

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Bank ETFs: Simple Exposure

Of course, if you simply want to gain exposure to the banking sector as a whole, rather than trying to pick individual stocks, a convenient way to do so is by investing in bank ETFs.

For example, the SPDR S&P Regional Banking ETF (#KRE) is a fund designed to mimic the US regional banking sector using a passive management strategy. This approach tracks the total return performance from Nasdaq's KBW Regional Banking Index.

Best Bank Stocks to Watch: Conclusion

The global economy has benefited, over an extended period of time, from a low-interest environment, but the Federal Reserve has repeatedly signalled its intention to normalise monetary policy.

Higher interest rates may create headwinds in certain areas for the banking sector, or may possibly provide new opportunities in others. Always use a risk management strategy while trading and investing, to ensure you are able to manage potential gains and losses.

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What are the best top 5 bank stocks to buy?

While this kind of question is always subjective and dependent on the individual, the potential best bank stocks to buy could include Goldman Sachs, Wells Fargo, Barclays, Lloyds Banking Group and HSBC.


What is the best dividend bank stock?

Most notably for 2023, the best dividend bank stock would potentially be Wells Fargo or JP Morgan, given their payout hikes at the beginning of this year.


Other Articles of Interest:


The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets and Admirals trademarks (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:
1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst (hereinafter “Author”) based on Brandie E Blackler, Financial Analyst and Writer, personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
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