10/9/07

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I wanted to point out another quality financial institution whose stock performance has lagged the Market.

U.S. Bancorp (USB) is a bank holding company with 2,400 offices and 4,000 ATMs in 24 states with approximately 32% of its loans to commercial enterprises, 21% to commercial real estate and 47% to individuals. The bank has a return on equity of over 20% and has grown earnings per share and dividends at a 12%+ pace over the last 10 years. USB should be able to maintain this admirable record as it grows its more stable fee oriented income, focuses on tight control over expenses and continues a significant share buy back program. This company would qualify for the Dividend Growth Portfolio were it not for its relatively high debt to equity ratio (62%). Its stock yields 5.2%.

EPS: 2006 $2.61, 2007 $2.60, 2008 $2.80; DVD: $1.62, YLD 5.2%

http://finance.yahoo.com/q?s=USB

Here is a generally positive write up on Abbott Labs another stock on the Dividend Growth Buy list.

http://www.seekingalpha.com/article/49291-abbott-laboratories-in-vitro-sale-may-prove-difficult

News on Stocks in Our Portfolios

More Cash in Investors’ Hands

Textron is acquiring United Industrial for $800 million in cash.