September 7, 2012
Written By Charles B. Carlson
“Regions Financial Corp. (RF)—This Editor’s Portfolio stock has shown new life in recent months, and the stock’s Overall Quadrix score of 86 reinforces the notion that the rebound is for real. Regions still has plenty of exposure to risky real estate loans, but investors seem to be growing a bit more comfortable with that risk. The stock’s quarterly dividend is just $0.01 per share.
“However, with the firm repaying its TARP loan earlier this year and the bottom line expected to be in the black this year and next, it would not be surprising to see the firm consider a dividend hike in 2013.
“A recent Wall Street Journal story citing a federal grand jury examination of ties between Regions Financial and an Atlanta-based executive recruiting firm may cause some volatility in the near term. Regions has been asked to turn over information about gifts, trips or vacations provided by Fiderion Group LLC to Regions executives, as well as loans Regions made to Fiderion. The stock is not for everyone, but investors who want to maximize the leverage of a rally in banking stocks may want to consider these shares. Regions’ direct-purchase plan has a minimum initial investment of $1,000. Subsequent investments are a minimum $100. There are no purchase fees. Selling fees are $15 plus $0.12 per share. The plan administrator is Computershare.”
Charles B. Carlson, CFA, DRIP Investor, September 2012