Interest rates on bank certificates of deposit are much higher than they were at the start of this decade. Even though the Federal Reserve has hiked its short-term federal funds rate 11 times since 2022, the average one-year CD yields 2%, according to Bankrate.com.

Woo-hoo. Sure, 2% is much more than 0.76%, the average CD rate in January 2020. Nevertheless, at current rates, it would take 36 years to double your money, and that doesn’t even take inflation into account.

Moreover, the next move in the Fed’s benchmark interest rate is likely lower, not higher.

Although the Fed says it will be patient until uncertainty clears about the strength of the economy and the ramifications of new trade tariffs, Wall Street traders expect the rate-cutting cycle that began in late 2024 to resume later this year.

So shopping for better CD rates now makes sense. Using our Bankrate tool allows you to compare options fast:

In some cases, you can get higher yields through a callable CD, a type of CD that gives the issuer the right to redeem it before it matures. But make sure you understand that CDs, including callables, can have good and bad features.

Locking in

A basic CD is fairly simple. You invest a certain amount with your bank for a set period of time, and the bank pays you interest. If you take out money before the CD matures, you’ll have to pay a penalty.

Those penalties vary from bank to bank, but they typically range from three to 12 months’ interest, three months for a one-year CD and 12 months for longer maturities, particularly five-year CDs.

CDs typically offer higher rates than bank money market accounts. Smart savers can use CDs to lock in those higher rates for months or years. Others use CDs to save for goals in the near future — and to make sure they don’t spend the money instead.

The call feature adds a bit more complexity.

For example, in late May, Fidelity Investments offered a one-year CD from JPMorgan Chase Bank with an annual percentage yield of 4.3% — more than twice the average one-year CD yield. (Fidelity puts the bank and the saver together in this transaction; JPMorgan Chase is the CD issuer.) The CD is insured by the federal government and has a minimum investment of $1,000.

Why the high yield?

Here’s where we come to the bad part. The CD is callable, meaning that JPMorgan Chase can call back the CD and return your principal with the interest earned to date.

Typically, that happens when interest rates fall and the issuer would prefer to offer you CDs with lower rates. In that event, you could be looking at reinvesting that cash in a CD with a significantly lower yield.

And that’s why you get the tasty rate from the callable CD at the outset: The higher interest rate is to compensate you for the risk that you’ll get a lower return than you may have wanted over the period you initially chose.

If rates go higher, it’s unlikely that the bank will call your CD. Deposits are an expense for banks, and they prefer to pay lower interest rates on customer accounts.

If you want to get a higher rate, you’ll have to wait until the CD matures, pay the early-withdrawal penalty or, if it’s a brokered CD, sell it on the secondary market.

The last option could be particularly unpleasant. Typically, selling a low-rate brokered CD when other brokers (including yours) are offering CDs with better yields is like trying to peddle hamburgers at a vegan convention.

You don't want a haircut

To sell a CD that pays 3% into a market where new CDs are yielding 4%, for example, you’d have to take a haircut on the principal, settling for an amount that’s below the face value, because buyers would naturally pay less for a below-market yield. And that’s assuming you can even find a buyer in the first place.

The call feature helps the bank, says Greg McBride, chief financial analyst at Bankrate. “It is very much a ‘heads I win, tails you lose’ proposition.”

As with many other complicated investment products, callable CDs tend to be sold, not bought, as the expression goes.

“It’s not a staple offering,” McBride says. “It’s kind of a unique structure, but it’s a structure that’s to benefit the issuing bank, not the depositor.”

Callable caveats

Be particularly wary of callable CDs if you use a CD ladder (arranging to have CDs of various maturities mature at regular intervals). A called CD could make you scramble for a substitute — an annoyance that could nullify one of the big advantages of having a CD ladder in the first place.

Typically, callable CDs have a period at the beginning of their term when they can’t be called, and they have a set schedule for when a call can occur.

In the example above, JPMorgan Chase can’t call the CD until November 2025, after which it can issue a call any month until the CD matures in 2026.

Don’t confuse the CD’s maturity date with its call date. If you’re looking to lock in current interest rates for five years, you may not be able to if the CD has a call date in two years.

“Be certain about what the actual maturity date of the CD is, and that it’s consistent with your investment time frame,” McBride says.

Typically, a bank will disclose both its current yield and its “yield to worst” — that is, up until the first possible date the bank may call the CD.

A more cumbersome process

CDs with call features aren’t common, but they aren’t rare either. Large banks tend to offer their callable CDs through brokerages, says Ken Tumin, founder of DepositAccounts.com, a rate-comparison site.

If you're searching for a brokerage, use our tool from Bankrate to compare options quickly:

Although many CD investors go through their brokerage accounts to make it easier to shop for CDs, callable CDs can make the process more cumbersome.

“My readers throughout the years haven’t been fond of them,” he says. “If they do use brokered CDs, they generally stick with non-callable.”

Many brokerages allow you to screen out callable CDs. Even so, always look for the terms of the CD offering before you buy.

If your main goal is to get a bit more yield over a short period of time, a callable CD might be worth it, Tumin says.

But if you’re looking for simplicity, callable CDs may not fit the bill.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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While many pundits suggested President Donald Trump’s real-world trade policies wouldn’t be as bad as his campaign rhetoric was last year, the stock market got a rude awakening in April. Executive orders from the White House sent the S&P 500 into free-fall thanks to what many saw as overly invasive tariffs, with the index down an ugly 13% since January 1.

Among other ignominious milestones caused by Trump’s tariffs, we’ve seen the worst short-term performance for stocks under any sitting president in modern history, per CNN, and the worst single-day decline since the realities of COVID-19 hit investors in 2020.

While some hold out hope that Trump is simply making an opening bid in a longer-term negotiation on global trade, a prolonged trade war would have serious consequences for portfolios as tariffs impact the stock market beyond the immediate volatility we’ve seen in early 2025. Exposure to select sectors could mitigate these risks, however, as certain companies are more susceptible to the negative influence of tariffs than others.

The following investment themes and the exchange-traded funds that express them could help protect risk-averse investors in the years ahead.

All of these ETFs are well-established, with more than $500 million in assets. They're also affordable, with annual expense ratios of less than 0.35%.

China's technology stocks

A bitter truth of the current Trump trade war is that while the U.S. stock market has struggled, other regions – most notably China – have seen outperformance in 2025. In particular, China’s tech sector has been doing quite well thanks to home-grown hardware and an increasingly sophisticated workforce with experience in software and IT services.

At the top of the list of investments capitalizing on this theme is a nearly $8 billion exchange-traded fund, the KraneShares CSI China Internet ETF (KWEB). This technology-focused China ETF has managed to post a gain since January 1 even as the rest of Wall Street – and in particular, large cap tech stocks like Nvidia Corp. (NVDA) – have melted down dramatically. That’s thanks to top KWEB holdings including Alibaba Group Holdings (BABA), which is actually up more than 20% since January 1 while the Nasdaq 100 is down almost 18% in the same period.

The story is similar with Invesco China Technology ETF (CQQQ). This technology-focused ETF is only down slightly from January 1 through Monday, April 4. Many individual holdings in this China technology ETF have done well, including familiar leaders in the nation like Tencent Holdings (TCHEY) that has eked out a small gain YTD even as the S&P 500 has suffered.

In short, the “America first” approach seems to be hurting U.S. technology stocks (Wall Street is worried about Apple, for example) more than their international peers. That’s particularly true considering the domestic reliance on China hardware, while competitors in Asia avoid similar reliance – and now have a surplus of local goods to make the most of in the age of a trade war.

European banks

Another regional investment theme that has done quite well in 2025 is a focus on Europe – specifically, in EU financial institutions. And in many ways, that groundwork for that success predates Trump’s trade war by several years.

After the U.K.’s “Brexit” vote in 2016 and its official exit from the EU in 2020, policymakers focused on a capital markets union that was self-sufficient – from London, but also from New York and anywhere else. More recently, price shocks after the 2022 invasion of Ukraine by Russian aggressors sparked a sense of urgency to shore up energy supplies and manufacturing to make the region self-sufficient.

The result has been what policymakers call “strategic autonomy” for the collective of European Union member states, built on local banking that serves local needs. And the timing couldn’t be better for this approach, as EU banks increasingly boast better profitability and a more inward-focused business model.

As proof of the success, check out the iShares MSCI Europe Financials ETF (EUFN) that is up about 8% year-to-date as U.S. stocks have stumbled. Meanwhile, the leading Financial Select Sector SPDR Fund (XLF) of domestic banks has lost 8% in the same period.

Utilities

Turning back to U.S. investments, utilities are one of the most reliable investments on Wall Street and have a history of providing safe havens in troubled times. Electricity is a necessity for homes and businesses in the 21st century, so there's always strong baseline demand.

What's more, while there may be volatility in the energy products used to generate power, these costs are almost always passed through to end-users who don’t have much choice. The sector is highly regulated and very expensive to operate, meaning utility stocks tend to be regional monopolies that don't face true competitive forces.

As a result, domestic utility stocks and the Utilities Select Sector SPDR Fund (XLU) will likely provide a smoother ride than more risky parts of Wall Street. In fact, the ETF is trading just a bit under flat on the year to make it “less bad” than most other sector ETFs. Top holdings in this fund include leaders in the sector such as NextEra Energy (NEE), Southern Company (SO) and Duke Energy (DUK) that are collectively valued at more than $240 billion and aren’t going anywhere regardless of short-term trade wars.

Investment-grade bonds

If you were hoping for an interest rate cut in 2025, perhaps the largest bit of good news out of this tariff mess is the increasing odds of Federal Reserve action as a result of weak business sentiment. Inflationary pressures have been a consistent concern lately, but now the central bank can comfortably blame a supply-driven trade war instead of demand-driven pressures from an overheating economy.

If you're particularly interested in safety, bonds are a logical choice because they are far less volatile than stocks generally. Furthermore, they offer nearly guaranteed yield so you can still generate income in retirement without worrying about selling assets into a downtrend.

And lastly, the face value of bonds have an inverse relationship with interest rates – so if rates do get cut, the principal value of related assets actually goes up because these older and higher-yielding securities are more attractive.

Investment-grade bonds – a category that includes debt of government entities as well as blue-chip powerhouses with strong balance sheets – are the top-tier of the debt markets and are particularly attractive right now as a result of these factors. These are the opposite of junk bonds, which are riskier and speculative in nature.

Of course, buying individual bonds requires much more savvy than buying individual stocks. That's why a bond exchange-traded fund like the Vanguard Total Bond Market ETF (BND) is a good choice.

With more than $127 billion in assets under management and a portfolio of some 18,000 different bonds, the fund yields about 4.5%. It's also full of rock-solid investments such as U.S. Treasury bonds. What’s more, BND is actually up slightly on the year from a share price perspective to provide a sweetener on top of that income stream.

Gold and gold miners

Looking beyond stocks and bonds to alternative assets, gold is often seen as the ultimate safe-haven investment during times of uncertainty. And with a 13% gain since January 1 as most stocks have suffered big-time in 2025, it’s hard to argue with that logic.

As an uncorrelated asset, the precious metal has the ability to hang tough or even move higher even when the stock market is melting down. Gold is also a hedge against inflation that is expected to occur if global supply chains are disrupted by trade policies.

Whether you're looking for a hedge against rising prices or diversification beyond the typical asset classes, the iShares Gold Trust (IAU) is one of the more affordable ways to get direct exposure to gold prices

IAU charges just 0.25% in annual fees, or $25 on $10,000 invested, which is much less than investors might pay to store, insure or transact with physical gold bullion.

It’s worth noting that gold miners can also be a good bet thanks to what’s called “operational leverage.” In short, many mining companies can easily ramp up production without significantly adding to cost – meaning they win both on the price of their gold brought to market as well as increased volume.

For this reason, the $93 billion VanEck Gold Miners ETF (GDX) has surged 24% since January 1, and some of its top holdings like Agnico Eagle Mines Limited (AEM) have fared even better than that. Just keep in mind leverage works both ways, so the volatility may be just as dramatic if and when the momentum moves away from gold miners in the months ahead.

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Financial stocks are in a sweet spot. Lower short-term interest rates, an expanding economy and some spectacular third-quarter results all helped to buoy shares in businesses that provide financial products or services in late 2024. The outcome of the U.S. presidential election boosted the shares even more; Wall Street has high hopes that the Trump administration will be bank-friendly.

All told, over the past 12 months, financial shares surged 31%. That beat the 25% return in the S&P 500 index, as well as the gains in every other sector except communications services (up 40%) and information technology (up 37%). When the final results of 2024 are in, if analysts are on target, the financial sector will have posted a nearly 15% jump in earnings from 2023, more than the 10% hop in earnings expected for the S&P 500.

Will the party continue in 2025? Analysts expect financial companies to post 7% to 9% growth in earnings in 2025 compared with 2024. That’s “still supportive growth for financials,” says Matthew Bartolini, head of Americas ETF research at State Street Global Advisors, especially when you consider that the sector currently trades at a bigger discount to the broad market than it typically does.

The financial sector’s price-to-book ratio (book value is assets minus liabilities) — one measure of the value of these kinds of firms — is currently at a 52% discount to the S&P 500 price-to-book ratio, says Bartolini; the typical discount is 44%.

Financials have some big-picture pluses in their corner, too. The economy has likely avoided a recession, and that’s good for banks, a prominent chunk of the overall sector. Also, short-term rates are moving lower, and longer-dated rates are inching up, which means the yield curve — the plotted line of interest rates of Treasuries with varying maturities — is now less inverted than it has been in recent years.

If the Federal Reserve cuts short-term rates another 0.50 percentage point in 2025, as expected, the yield curve could steepen further, a profitable setup for banks, which typically borrow at short-term rates and lend at long-term rates, says Bartolini.

How to invest in financial stocks

The financials sector is broad and includes investment managers, banks, brokers, exchanges, fund companies and insurers, among others. But due to specific catalysts, certain industries, such as asset managers, investment banks, property and casualty insurers, and regional banks, boast better near-term prospects than other financials.

To see why we like these corners of the financial sector and to explore ways to cash in, read on. All returns and data are through December 31, unless otherwise noted.

Asset managers

Strong stock returns and healthy inflows of new cash have fueled this category recently, lifting total assets under management. More growth is ahead as an increasing number of investors nearing retirement opt to get professional help to achieve their financial goals. Industrywide, assets under management are expected to grow 34% a year until 2032, according to PwC, an accounting and professional services company. Firms that have a good handle on technology and a solid footprint in the expanding markets of alternative assets and private equity and debt will have an edge in the money grab.

That’s where BlackRock (BLK, $1,025) fits in. Its popular exchange-traded funds, used widely by retail and institutional investors, are driving growth in assets under management, which hit $11.5 trillion at the end of the third quarter.

On top of that, BlackRock has Aladdin, a technology platform that financial firms around the world use to analyze risk, manage portfolios and make investment decisions. It “widens the moat around BlackRock, provides a diversified revenue stream and gives the firm a competitive edge over other plain-vanilla asset managers,” says CFRA Research analyst Catherine Seifert.

Meanwhile, BlackRock has been buying other businesses to beef up its share of private markets and alternative assets. Recently, it announced an acquisition of HPS Investment Partners, a leading private-credit shop, and closed on its purchase of Global Infrastructure Partners, an alternative assets fund.

As the world’s largest asset manager, BlackRock could trade at a hefty premium to the typical investment management firm stock. But it doesn’t. At $1,025, the stock’s price-earnings ratio of 21 is just a tad above the P/E of 18 of the typical asset management firm.

Investment banks

Lower interest rates will spur initial public offerings in the stock market and mergers and acquisitions among corporations, transactions that have been in a bit of holding pattern of late. Some market gurus think the Trump administration may end certain regulations that helped slow the pace of deal closings in recent years.

But it’s tricky to peg investment decisions on what a new administration might do, which is why we still like Goldman Sachs (GS, $573), a stock we've previously recommended in Best Stocks to Buy Now. Its business is already humming. The firm crushed analysts’ expectations in 2024’s third quarter, with double-digit revenue growth in nearly all of its business segments, including a 46% jump in debt underwriting and 20% growth in investment banking fees. At $573, Goldman shares trade at 13 times expected earnings for the year ahead, basically in line with the average investment banking company P/E of nearly 14. Meanwhile, analysts expect 18% annualized earnings growth over each of the next three years.

Property and casualty insurers

Demand for property and casualty insurance is rising. Natural disasters are increasingly destructive — the 2024 hurricane season may have been among the costliest ever. Businesses of all kinds face a heightened need to protect against threats to intellectual property and cybersecurity. And jury awards of $10 million or more, called “nuclear verdicts” in the industry, have become commonplace, boosting demand for protection against them.

Catastrophes and losses are, on the whole, good for insurers’ bottom line. Though claim payouts tend to trim profits, insurers can simply raise premiums. In the property-casualty insurance industry, this price-hiking scenario is called a “hard cycle” because it’s hard for consumers and businesses to find insurance at attractive prices. But for investors, it means the insurance business is on the upswing.

W.R. Berkley (WRB, $59) is led by founder William R. Berkley, which we view as a big plus. The company offers a variety of insurance products for construction companies, financial institutions, hospitals and retailers, among others. Analysts expect 8% revenue growth and 7% earnings growth in 2025. Though shares have climbed 27% over the past 12 months, the stock trades at 14 times earnings, below its five-year median P/E of 17. That’s a discount compared with peers, too, which trade at a P/E of 27.

Argus Research analyst Kevin Heal says W.R. Berkley’s strong position in the property-casualty market is reflected in revenues and earnings that are growing faster than at peer insurers.

Another way to play the upturn in the property-casualty insurance cycle is through insurance brokerage firm Willis Towers Watson (WTW, $313). Since its planned merger with Aon was aborted in 2021, the company has struggled to be competitive in its core insurance brokerage business (41% of revenues), and total revenue growth was anemic in 2022.

But there are signs that the company’s cost-cutting and restructuring efforts are starting to have an effect, and that could lift shares higher. Though Truist Securities analyst Mark Hughes expects a slight tick down in overall revenues in 2025 compared with 2024, profit margins are expanding, and the company could deliver a 5% jump in earnings. Emerging interest in cybersecurity coverage could provide another boost to the business’s results.

In December, Hughes set a $380 price target on shares, a 21% increase from recent levels. The stock trades at a P/E of 17, a discount to the multiple of the typical insurance-broker stock.

Regional banks

Regional bank stocks tanked in 2023 after Silicon Valley Bank, among others, failed. But things are looking better. Lower interest rates have helped; regional banks tend to depend on net interest margin — the difference between how much the bank earns on the loans it issues and how much it pays on customer deposits — to drive earnings.

A healthy economy and low unemployment are also boosters. “The number-one driver of bank performance is low unemployment,” says CFRA Research analyst Alexander Yokum. Finally, regional banks are better capitalized these days. After Silicon Valley Bank collapsed, many regional banks built up their cash reserves, fearing that capital requirements — the amount of cash that regulators require a bank to have on hand — might increase.

Shares in Bank OZK (OZK, $43), formerly Bank of the Ozarks, are downright cheap. (The Ozarks encompass Missouri, Arkansas, Oklahoma and a small patch of Kansas). The stock trades at less than seven times earnings, a 36% discount to peers. “We think its discount to peers is too big,” says John Buckingham, editor of The Prudent Speculator.

The stock, down 7% over the past 12 months, has lagged its peers partly because investors are worried about the bank’s commercial real estate exposure given the work-from-home trend — regional banks tend to be loaded with such loans, so it’s a primary concern in this sub-industry. But workers are starting to return to the office, and besides, Bank OZK tends to be conservative, says Buckingham. It partners with strong developers and incorporates defensive loan structures, among other things, to embed a measure of safety into its loans.

PNC Financial Services (PNC, $193) is the biggest regional bank, serving some fast-growing states, including the Carolinas and Texas, among others. Its heft makes it a more stable stock than other regional banks. What’s more, PNC is ably managed. “Bill Demchak, the CEO, tends to make the right decision every time,” says Yokum.

PNC wasn’t loaded up on long-term bonds in 2022, for instance, when they lost value after the Federal Reserve raised rates (bond prices and yields move in opposite directions), a strategy that led to the failure of Silicon Valley Bank and caused trouble for a few others. PNC also trimmed its commercial office real estate exposure by 16% over the past year, to just 2.2% of total loans.

A big minus is that PNC’s shares soared in 2024. But a late-year breather now puts the stock up 29% over the past 12 months. The stock currently trades at 13 times earnings, in line with the P/E of the average regional bank stock.

Financial picks for fund investors

If you want to beef up exposure to the broad finan­cial sector, consider an index-based diversified financials exchange-traded fund, such as iShares U.S. Financials ETF (IYF, $111) or Financial Select Sector SPDR ETF (XLF, $48). Or you could go with an ac­tively-managed mutual fund, such as Fidelity Select Financials Port­folio (FIDSX) or T. Rowe Price Financial Services (PRISX).

Certain industry ETFs, however, allow you to home in on the more promising sections of the financial sector.

Invesco KBW Property & Casualty Insurance ETF (KBWP, $116), for instance, tracks an index of 24 stocks, including the Travelers Companies, Allstate and Chubb. Its five-year 12.7% annua­lized record beat 80% of its financial-fund peers.

For regional banks, we like iShares U.S. Regional Banks (IAT, $50). It holds 34 stocks weighted by market value. PNC Financial Services, U.S. Bancorp and Truist Financial are top holdings. Over the past 12 months, the fund has gained 24%.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Berkshire Hathaway (BRK.B) was once again a net seller of stocks in its most recent quarter. But if you think Warren Buffett, who will step down as CEO at the end of 2025, has caught the "AI is a bubble" bug, think again.

The Oracle of Omaha has been easing off equities and hoarding cash for quite a while. In the past three years, Berkshire was a net seller of stocks to the tune of $190 billion. Also noteworthy is that Berkshire hasn't engaged in stock buybacks since May 2024.

As a result, Buffett is running a sort of "barbell" portfolio. Berkshire, with a market cap of more than $1 trillion, holds $280 billion in stocks and a whopping $380 billion in cash.

Berkshire's cash pile has been boosted by comparatively high short-term interest rates, as well from pruning its portfolio. Buffett once again pared BRK.B's stakes in major long-term holdings such as Apple (AAPL), Bank of America (BAC) in the most recent quarter.

The Apple sales are particularly noteworthy. Not too long ago, the iPhone maker accounted for roughly 40% of Berkshire U.S. equity portfolio. Today, it's closer to 23%.

For some folks, these are highly disquieting developments. When one of the greatest investors of all time is selling massive amounts of stock in some of his favorite names, it's understandable if people believe they would feel better about it if only they knew why.

First things first, however. Buffett took pains to explain to Berkshire shareholders at their annual meeting in May that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)

If Buffett has a problem with AAPL, it's that the value of Berkshire's stake has grown tremendously at a time when he expects corporate tax rates to rise, probably sometime in the not-too-distant future.

As Buffett told the Berkshire faithful in August 2024: "If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year."

Perhaps the same thinking informed Berkshire's paring of its stake in Bank of America. The fact that owning more than 10% of a publicly traded company's shares triggers disclosure requirements large shareholders would rather avoid for as long as possible is another reason to bring one's ownership below a regulatory threshold.

What we know is that Buffett has been a net seller of equities for 12 consecutive quarters. Share repurchases have ground to a halt, too. For context, Berkshire repurchased more than $9 billion worth of BRK.B stock in all of 2023.

This is not the sort of behavior one typically sees in someone with excessive confidence in equity prices.

What gives?

Buffett stocks sales: An expert's take

If Warren Buffett is selling stocks and not buying back his own, that might tell us something about the Oracle of Omaha's view of the market, writes Nicholas Colas, co-founder with Jessica Rabe of DataTrek Research.

As a multidecade market watcher and market participant, Colas posits three potential explanations for Buffett's "unusual activity."

The first explanation is that Buffett is calling a top. "Buffett sees stocks as overvalued, including his own, and therefore susceptible to a deep correction or outright bear market," Colas writes.

It's interesting that Berkshire holds $380 billion in cash. "That’s a lot of firepower if markets see a sustained drop," notes Colas. "While Berkshire is not especially expensive, its multiple may be worrisome to a value investor."

Don't forget that Buffett likes nothing more than to be greedy when others are fearful. If stocks crash, Berkshire will be able to go shopping for assets at deep discount prices.

M&A on tap

Then there's the possibility that Berkshire is amassing cash to effect a truly whale-sized deal. "Berkshire may have identified one or more large acquisitions and is raising capital for those purchases," Colas writes. He adds that BRK.B's $380 billion in cash would comfortably buy all of Coca-Cola (KO) or Goldman Sachs (GS).

Colas emphasizes that the latter two are only examples, not risk arbitrage trading ideas. They do make sense, however. Coca-Cola, a Buy-rated Dow Jones stock, has been a core Berkshire holding for four decades.

As for Goldman Sachs, Berkshire has been a major shareholder in the past. (Recall that Buffett gave GS an injection of capital during the Great Financial Crisis.)

Passing the baton

Lastly, Colas postulates that it's possible Buffett is simply preparing the company for his departure as CEO. (He will stay on as chairman.)

Perhaps Buffett "wants to clear the decks for his successors to remake Berkshire's portfolio and rethink the company's stock repurchase program," Colas says.

"At 95 years old, he has certainly earned the right to ride off into the sunset as one of the greatest investors of all time."

The bottom line

The most important takeaway from Colas' note: "We wouldn't read too much into Buffett's latest moves since there is more than one logical explanation for his actions."

Let's pause on that for a moment, because it's important. As folks have noted before, if copying Warren Buffett's buys and sells was all it took to become the next Warren Buffett, there would be a lot more Warren Buffetts in the world.

As far as we know, there is still only one.

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Whether you like it or not, members of Congress are allowed to buy and sell stocks. True, federal law prohibits them from using "nonpublic information derived from their official positions for personal benefit," and they're required to disclose their trades.

That said, it's understandable if folks don't quite trust politicians to be on the up and up when their personal fortunes might appear to be in tension with their duties as elected representatives.

Perhaps this is unfair; even cynical. But to modify a famous quote from Upton Sinclair, it's difficult to get a person to understand something when that person's salary depends upon the person not understanding it.

Take, for instance, the uproar around President Donald Trump, who said shortly before announcing a reversal on reciprocal tariffs that it "is a great time to buy stocks."

The reversal sparked a historic stock market rally and has some high-profile Democrats questioning if anyone in the Trump administration profited off the announcement.

Disclosure rules are supposed to help mitigate this problem. Thanks to these requirements, the public can follow what members of the House and Senate are doing with their investments.

Before we go further, please note that this activity shouldn't be used for trading purposes.

After all, insider buying and selling at publicly traded companies is voluminously disclosed and analyzed, but it doesn't really tell us much. That's because insiders – the executives and board members who know what's going on – can sell for any number of legitimate reasons, from paying tuition to portfolio diversification.

When it comes to stocks, insider buying is actually a more useful piece of information. And even then, it's not exactly a screaming buy signal.

Using insider activity among members of Congress as the basis for some kind of trading system is not a rigorous idea.

With those caveats out of the way, it is indeed interesting to see which stocks, bonds and private investments are most popular with members of the House and Senate. Perhaps more interesting is how certain pols churn their portfolios, which is to be avoided if you're a retail investor.

Have a look at the below table to see which politicians were the most active traders by volume over the past 90 days, according to data from Capitol Trades.

Stocks politicians are buying and selling

Look past the municipal debt and investments in limited liability companies, and you can see that pols are pretty normal when it comes to their buys. Top-rated Dow Jones stocks, mega-cap tech names and reliable and rising dividend-payers routinely make the list of our representatives favorite names.

Both sides of the aisle like many of the hottest stocks, including Apple (AAPL), Amazon.com (AMZN), Oracle (ORCL) and Broadcom (AVGO) these days – but then so does pretty much everyone else.

Interestingly, as much as Representative Ro Khanna (D-Calif.) is associated with tech investing, a number of his most recent biggest buys were stalwart blue chips such as JPMorgan Chase (JPM), the nation's biggest bank by assets, and Warren Buffett's Berkshire Hathaway (BRK.B).

Meanwhile, in addition to buying shares in speculative artificial intelligence (AI) firm BigBear.ai Holdings (BBAI), Representative Lisa McClain (R.-Mich.) also picked up Air Products and Chemicals (APD), which happens to be one the best dividend stocks for reliable dividend growth.

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Warren Buffett's Berkshire Hathaway (BRK.B) initiated small positions in Ulta Beauty (ULTA) and Heico (HEI) in the second quarter, bought more Chubb (CB), pared stakes in eight names – most notably, Apple (AAPL) and Chevron (CVX) – and exited bets on Paramount (PARA) and Snowflake (SNOW).

There were other moves, as well, but the biggest news to come out of Berkshire's latest regulatory filing was already known. Buffett slashed Berkshire's stake in Apple by almost half. As previously reported, the holding company also reduced its exposure to top holdings such as Chevron and Bank of America (BAC).

Keep in mind that Buffett told Berkshire shareholders that the Apple sales were done for tax purposes, as he expects corporate tax rates to rise sometime in the not-too-distant future. The same thinking could apply to BRK.B's other sales, but then it's not unusual for Buffett to be a net seller of equities when stocks are trading at record levels.

All told, Berkshire sold roughly $77 billion in equities in Q2 – mostly Apple – and purchased less than $2 billion. At any rate, with exactly 400 million Apple shares still in the portfolio, Buffett would appear to be done selling his favorite stock.

Earlier this year, the greatest long-term investor of all time said AAPL is "even better" than American Express (AXP) or Coca-Cola (KO), two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

Perhaps it's a coincidence, but Berkshire now holds 400 million AAPL shares – or the exact same number of shares it has held in KO for decades. 

Before we detail Berkshire's quarterly buys and sells, it's important to know that Buffett has always maintained a highly concentrated portfolio. The top five holdings account for almost three-quarters of its U.S. equities portfolio value, while the top 10 account for more than 90%. 

As Buffett likes to say, diversification is for people who don't know what they're doing.

Stocks Warren Buffett is buying

Berkshire picked up two new stocks in Q2: Ulta Beauty and Heico. Berkshire bought 690,000 shares of Ulta Beauty worth $266 million at the end of the Q2. With a weight of 0.1% in the Berkshire Hathaway portfolio, or its 30th largest position, the cosmetics retail chain won't be moving the needle much on Berkshire's returns.

Meanwhile, with a weight of just 0.07%, Heico is even less material. Berkshire accumulated a little more than 1 million shares in the supplier to the aerospace industry. The stake was worth $185 million as of the end of Q2. 

The comparatively small size of the purchases could mean they were initiated by Buffett's co-portfolio managers Ted Weschler or Todd Combs.

On the other hand, one of the largest additions Berkshire made in Q2 was probably the work of Buffett himself. As previously disclosed, BRK.B bought another 7 million shares in Occidental Petroleum (OXY). (Buffett has added to OXY on weakness in the past.) The holding company owned 255 million shares worth $16 billion at the end of the quarter. At 5.8% of its portfolio, OXY is Berkshire's sixth largest holding.

In another interesting move, Buffett also added to Chubb, the insurance company Berkshire first picked up just a quarter ago. The holding company increased its stake by 4.3%, or more than 1 million shares. With roughly 27 million shares worth $6.9 billion at quarter's end, Chubb accounts for a hefty 2.5% of the portfolio, or Berkshire's ninth largest holding.

Elsewhere, Berkshire fiddled with some of its smallest positions, upping its bets on rather immaterial holdings such as Liberty Sirius XM Group, Series C (LSXMK) and Liberty Sirius XM Group, Series A (LSXMA). Note that the company cut its stakes in the tracking stocks last quarter. Berkshire also bought more Sirius XM Holdings (SIRI) – a position it reduced in Q1.

Stocks Warren Buffett is selling

As noted above, Apple accounted for almost all of Berkshire's Q2 sales. Other reductions included Chevron, a Buy-rated Dow Jones stock, which Buffett first purchased four years ago. In Q2, Berkshire cut CVX by 3.6%, or 4.4 million shares. With 119 million shares worth $18.6 billion at the end of the quarter, the integrated oil major is Berkshire's fifth largest holding.

Other sales included a more than 20% reduction in Capital One Financial (COF). Berkshire sold 2.7 million shares in the financial services company in Q2, bringing its position down to 9.8 million shares worth $1.4 billion. With a 0.49% weight in the portfolio, COF is Berkshire's 19th largest bet. 

Berkshire also continued to clean and prune a number of its mid-level equity holdings, paring its stakes in T-Mobile US (TMUS), Louisiana Pacific (LPX), Liberty Media (LLYVK), Liberty Media (LLYVA) and specialty retailer Floor & Decor (FND).

Buffett also closed out its stake in Paramount, dumping all 7.5 million shares. The company first bought PARA in early 2022. It didn't work out.

Lastly, Berkshire exited its position in Snowflake (SNOW), which is believed to have been the work of subaltern Todd Combs. Berkshire made a rare bet on an initial public offering (IPO) with Snowflake in the third quarter of 2020. SNOW has an all-time total return of negative 16%.

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Warren Buffett's Berkshire Hathaway (BRK.B) slashed its stake in Apple (AAPL) by almost half during the second quarter, further rattling a tech sector already under scrutiny over its massive spending on AI – and naturally unnerving some Apple shareholders, too.

After all, Apple stock has been the single largest position in the Berkshire Hathaway equity portfolio for years, typically carrying a weight in excess of 40%. And yet Buffett has been paring Berkshire's enormous Apple stake at an alarming rate in 2024.

He's also taken something off the top of Berkshire's second largest holding, Bank of America (BAC).

Buffett has said his preferred holding period is forever. It's also important to know that Buffett is not, and has never been, a market timer. Furthermore, he has had nothing but praise for Apple – calling it "Berkshire's third business" – and openly admires Bank of America CEO Brian Moynihan. 

So what's going on?

Stay tuned for churn

We won't get the full details of which stocks Warren Buffett bought and sold in the second quarter until Berkshire Hathaway discloses its changes in holdings after the market closes on August 14. 

What we do know now is that this isn't the first time Buffett has taken a big bite out of Berkshire's Apple stake this year. As we wrote at the time, BRK.B cut its position in AAPL by 13% in the first quarter. Keep in mind that Buffett was explicit that this was done for tax purposes: 

"Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)"

If Buffett has a problem with AAPL, it's that the value of Berkshire's stake has grown tremendously at a time when he expects corporate tax rates to rise, probably sometime in the not-too-distant future. 

As Buffett told the Berkshire faithful: "If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year."

Buffett pointed out that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%. This man has been around a long time. He knows tax policy is never written in stone.

Perhaps Buffett's calculus explains the thinking behind the BAC sales too. As with Apple, Berkshire has enjoyed outsized returns from its investment in Bank of America. Indeed, Buffett liked the bank so much that Berkshire received special regulatory approval to acquire more than 10% of its shares outstanding. That's commitment.

The bottom line is that whatever Buffett is up, it's actually sort of irrelevant. He is a professional capital allocator. It's his job to maximize the returns on the capital entrusted to him. You either trust Warren Buffett or you don't. If you don't trust him, fine. You're not going to hurt his feelings. His track record sort of speaks for itself.

More selling to come

If today's news bothered you, you might want to skip next Wednesday. That's because Berkshire Hathaway tends to be a net seller of equities when stocks are at record highs. 

The holding company sold $77 billion worth of stock in Q2, mostly Apple. But do not be surprised if we learn that Buffett & Co. trimmed or exited positions in any number of other holdings when Berkshire files its Form 13F with the Securities and Exchange Commission after markets close on August 14. 

Buffett has this funny habit of trying to buy stocks when they are selling at lower prices rather than higher prices. Stocks are pretty pricey these days. Buffett is selling. What's the mystery?

By the way, some folks might try to use Buffett's buys and sells as signals for what to do with their own portfolios. 

That would be silly. 

As noted above, Buffett is not a market timer. This is the man who wrote in The New York Times in October 2008 that he was buying stocks. The market didn't bottom until months later, in March 2009. 

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," Buffett said. 

No, Buffett didn't bottom-tick the S&P 500's 50% collapse. The market fell another 28% from the time he penned that op-ed to equities' nadir. And all Buffett did was buy shares in great companies at cheaper and cheaper prices, probably the entire way down. (Berkshire shareholders then benefited by riding those prices all the way back up.)

As much fun as it might be to see which stocks Warren Buffett is buying and selling, you cannot copy his moves and expect to get the same returns. There are a bunch of reasons for this, but let's keep it simple: Buffett has access to a massive pile of really cheap capital and you don't.

You're no Warren Buffett

Berkshire's timing could have been better. It didn't do market sentiment any favors by releasing its results ahead of a global rout in equities that was mostly sparked by what's happening to the Japanese yen. But that's not on Buffett.

Markets go down as well as up. Pullbacks are normal. "The average drawdown from peak-to-trough in a given year in the U.S. stock market going back to 1928 is -16.3%," notes Ben Carlson, director of institutional asset management at Ritholtz Wealth Management. "Since 1950, the S&P 500 has had an average drawdown of 13.6% over the course of a calendar year."

Volatility is the price of admission to the stock market. The greater the reward, the greater the risk. If you can't handle the equity risk premium, stick to bonds.

In the meantime, leave professional capital allocation to the pros. Word is Warren Buffett is pretty good at it.

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Large banks provide vast ATM networks, advanced technology and a wide array of products. But when it comes to interest rates on savings accounts, they’re often overshadowed by small banks and credit unions. While a number of local institutions and internet banks recently offered rates of 5% or more on savings accounts and money market deposit accounts, interest rates on some large banks’ accounts have barely budged since the Federal Reserve Board started hiking short-term rates in March 2022.

A 2023 research paper published by the UCLA Anderson School of Management concluded that customers of large banks are willing to accept low rates on their savings in exchange for other benefits large banks provide. Small banks are compelled to offer higher rates on deposits in order to stay competitive, the economists found. 

The economists also concluded that customers of small banks are more price-sensitive than large-bank customers, who typically have higher incomes and live in urban areas. Small banks and credit unions tend to charge lower fees for monthly account maintenance and overdrafts, too. 

Large banks have also benefited from inertia, says Ken Tumin, founder of DepositAccounts.com, a website owned by LendingTree. Many customers of large banks don’t pay attention to what they’re earning on their savings after they open an account, providing little incentive for banks to raise rates, he says.

If you’re looking for a higher yield on your savings, check out accounts from internet banks, which offer many of the best deals. These institutions can offer extremely competitive rates because they don’t have to spend money on brick-and-mortar branches.

You can compare current rates on savings accounts by using the tool below.

The Fed left interest rates unchanged at its March meeting but signaled that it will likely cut rates later this year. If that happens, institutions of all sizes will lower their rates, too. Look for rates on high-yield online accounts to fall first, Tumin says. Some online banks have already reduced rates on certificates of deposit in anticipation of a Fed rate cut.

Fortunately, there’s no need to pledge fidelity to one bank or credit union. You may choose, for example, to locate your checking account at a small bank or credit union that doesn’t charge a monthly fee and invest your emergency savings in a high-yield online savings account.

Choosing the right credit card

Generally, interest rates on credit cards from small and medium-size banks and credit unions are lower than rates on cards issued by large financial institutions, even for borrowers with good credit, according to a recent analysis by the Consumer Financial Protection Bureau. For example, the median interest rate for people with good credit was 28.20% for large credit card issuers compared with 18.15% for small issuers, according to the CFPB. 

While that’s a significant difference, carrying a balance on a credit card with an 18% interest rate is no bargain, says Ted Rossman, senior analyst for CreditCards.com. Before March 2022, when the Federal Reserve Board embarked on a series of rate hikes in an effort to throttle inflation, it was possible to find credit cards that charged as little as 6% or 7%, but that’s no longer the case, he says. 

Use the tool below to compare fast, personalized credit card offers.

Instead of hunting for a low-rate credit card, Rossman says, endeavor to pay off your card’s balance every month so that you avoid interest altogether. Consumers who don’t carry a balance can come out ahead with the numerous perks that rewards credit cards from big banks offer, such as frequent-flier miles and cash back on a variety of purchases. (Kiplinger keeps a list of our favorite rewards cards). 

While the CFPB found that credit cards from large banks were more likely to charge annual fees, there are plenty of major credit cards — including some with generous rewards structures — that charge no annual fee. 

Big banks are also more likely to offer balance-transfer deals with an interest rate as low as 0% for a specific period. While these offers provide a way to reduce the interest you pay on your debt, they make sense only if you pay off the balance before the 0% window expires. Otherwise, you’ll likely end up paying a double-digit rate on the remaining balance.

How to break up with your bank

Switching to a bank or credit union that offers a higher yield on your savings could significantly increase the amount of interest you earn. However, the process may take several weeks. 

What you need to do:

• Open the new account before closing the old one. You may be able to do this online. Make sure your initial deposit is large enough to avoid low-balance fees.
• Contact your employer (or the Social Security Administration, if you’re receiving benefits) and arrange to have direct deposits switched to your new account. Make sure you include all accounts, such as TreasuryDirect, that deposit funds periodically.
• Contact all providers, such as utilities and streaming services, that debit your account, and provide them the information for your new account. If you use your bank’s bill-pay service, cancel the bill payments at your previous bank’s site and enroll at your new bank’s site.
• Make sure all automatic payments and outstanding checks have cleared before closing your old account.

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Have you ever noticed that equity investors can't have nice things? As miserable as we are when stocks are going down, we're even more unhappy when they're going up.

There's an empirical explanation for this psychological phenomenon. It's called "loss aversion." Humans are at the mercy of all sorts of cognitive biases, and one of the more perverse ones is that we experience far more pain from losing money than we experience pleasure from winning the same sum.

That's why when markets are rising, stocks are said to be climbing a wall of worry. The higher stocks climb, the more investor anxiety mounts. That's loss aversion at work.

Cut to today, with markets at record highs and valuations stretched by just about any metric you care to use, and it's only natural for investors to question if stocks are in a bubble.

Stocks never go up in a straight line, but that's pretty much what the S&P 500 did after bottoming out early last spring. From its April 7, 2025, intraday low to its close on December 31, the benchmark index was up 41.6% on a price basis. Such a torrid run has U.S. equities trading at some of their very priciest levels in history, according to BofA Securities.

As of December 31, on 18 of 20 metrics the S&P 500 was trading at statistically expensive levels, according to a note to clients from Savita Subramanian, head of U.S. equity strategy and U.S. quantitative strategy at BofA Global Research. Four of the metrics — Market Cap to GDP, Price to Book, Price to Operating Cash Flow and Enterprise Value to Sales were at record highs.

Is the stock market in a bubble? Here's how to tell

Happily, valuation is not a timing tool, as strategists take pains to point out. As Subramanian suggests, opportunities remain for investors willing to look for selective sector opportunities

Meanwhile, though questions remain about when and whether the Federal Reserve will cut interest rates amid a backdrop of broadening and accelerating profits, it's not hard to argue for a boom in earnings-per-share and GDP growth.

It's also possible that stocks have structurally re-rated to carrying richer valuations, as Subramanian noted earlier in 2025.

"The S&P 500 has changed significantly from the 80s, 90s and 2000s," explains Subramanian. "Perhaps we should anchor to today's multiples as the new normal rather than expecting mean reversion to a bygone era."

Perhaps most important, bubbles are as much of a psychological phenomenon as a financial one.

There's no substitute for experience on Wall Street, which is why it's always wise to listen to old hands when it comes to divining the market's machinations. Nicholas Colas, co-founder with Jessica Rabe of DataTrek Research, started working full-time on Wall Street in 1986. He lived through the October 1987 stock market crash and has witnessed every boom and bust up close ever since.

Colas has developed a three-point checklist for "spotting unhealthy, runaway markets." Here's a thumbnail version:

The market for initial public offerings gets frothy. Although the number of IPO announcements hit a multiyear high in the third quarter, the market for new issues has been subdued since it peaked in 2021. Higher interest rates and the availability of private-market funding remain headwinds.

"The good news is that history shows a rampant IPO market is a clear sign of a top," Colas notes. "We're nowhere close to that now."

Hallmark mergers and acquisitions (M&A) deals. "Exceptionally bad deals happen at the top, even if at the time they seem quite sensible," Colas writes. "M&A activity is ultimately a function of CEO/board confidence. Just like retail investors chasing hot IPOs at a market peak, senior managers fall prey to the same overconfidence that the good times will last forever."

Happily, M&A activity, while picking up, also remains under control. Through November 30, M&A volume was up 2% year over year in 2025, according to PwC.

A double is a bubble. Colas has a general rule to identify unsustainably high prices in a range of markets. Whenever the S&P 500 doubles in three years or less, stock prices decline shortly thereafter. The same is true about the Nasdaq Composite over any rolling one-year window going back to the early 1970s, notes Colas.

"A double is a sign of speculative excess because macro conditions are never so different that asset prices should rise 100% over a short period of time," Colas says. "Markets are reasonably good discounting mechanisms. When prices double, you know speculation — not fundamentals — are driving those gains."

Even the Nasdaq Composite, which is the frothiest equity market right now, is up "only" 20% over the past year.

Another tech bubble?

The remarkable bull market in equities was given fresh fuel by the Federal Reserve's jumbo interest rate cut in September 2024, but it's uncertain how much more fuel monetary policy can provide from here. Meanwhile, bubble anxiety centers around the AI companies, such as the Magnificent 7, that dominate the S&P 500 and Nasdaq-100.

Naturally, echoes of the bursting of the dot-com bubble are tat the op of anxious investors' minds.

"The introduction of transformative technologies typically attracts growing investor interest as well as significant capital and new competition," writes Peter Oppenheimer, chief global equity strategist and head of macro research Europe at Goldman Sachs. "As enthusiasm builds and stock prices increase, the sum of individual company valuations can overstate the total potential aggregate returns; often a bubble develops and bursts."

Oppenheimer notes the technology sector has generated 32% of the global equity return and 40% of the U.S. equity market return since 2010. This reflects stronger fundamentals rather than irrational exuberance.

"In our view, the technology sector is not in a bubble and is likely to continue to dominate returns," the strategist adds. That said, "concentration risks are high, and investors should look to diversify exposure to improve risk-adjusted returns while also gaining access to potential winners in smaller technology companies and other parts of the market."

Are stocks in a bubble?

None of Colas' time-proven indicators point to a stock market bubble, but a bubble very much remains a possibility in 2026, Colas says. Keep an eye on IPOs, M&A and how fast market levels rise from here.

Also remember that while the explosive growth in all things AI has valuations looking stretched, Goldman Sachs' Oppenheimer notes, "valuations often also understate the opportunities that can accrue in the nontechnology industries that can leverage the technology to generate higher returns."

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The S&P 500 Dividend Aristocrats index looks only a little different as we head into the second half of the year. 

Widely regarded as some of the best dividend stocks for dependable dividend growth, the S&P 500 Dividend Aristocrats is an index of S&P 500 companies that have raised their dividends for at least 25 consecutive years.

That's kind of a big deal if you are a long-term equity income investor. Regular dividend hikes not only increase the yield on an investor's original cost basis over time, often quite dramatically; they also help investors sleep better at night.

After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders.

S&P Dow Jones Indices, which rebalances the index quarterly, ditched Walgreens Boots Alliance (WBA) at the beginning of 2024 after the pharmacy chain slashed its dividend by almost half.

Walgreens had increased its dividend every year for nearly half a century before the cut. Analysts, who regularly give WBA one of the lowest rankings of all 30 Dow Jones stocks, applauded the decision to take cash earmarked for shareholders and invest it back into the business. 

Perhaps most interesting is what will happen to long-time member 3M (MMM). The Dow stock is on the Aristocrats chopping block after slashing its dividend as part of its Solventum (SOLV) spin off. 3M is expected to be cut from the list of dependable dividend payers when S&P Dow Jones next rebalances the index.

Dividend Aristocrats Fastenal and Kenvue

The Dividend Aristocrats membership list remains at 67 stocks, however, as Fastenal (FAST) was added to the index in the first quarter of 2024. The industrial supplier has raised its dividend for 25 consecutive years, making it available for inclusion in the index. 

Most recently, Fastenal declared a quarterly cash dividend of 39 cents per share to be paid on February 29 to shareholders of record as of February 1. The company generated more than $1 billion in levered free cash flow in fiscal 2023, and that was after paying out more than a billion dollars in dividends. 

Fastenal stock sports a dividend yield of 2.4%, which is fairly generous for an Aristocrat. The exchange-traded fund that tracks the index, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), has a dividend yield of 2.1%. 

Other changes to the Dividend Aristocrats over the past year include the removal of VF Corp. (VFC) and the addition of Kenvue (KVUE), which was spun off from fellow Aristocrat Johnson & Johnson (JNJ). 

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Warren Buffett's Berkshire Hathaway (BRK.B) initiated a small stake in The New York Times Company (NYT) in the fourth quarter but continued to pare back bets on core holdings such as Apple (AAPL) and Bank of America (BAC).

Buffett, who stepped down as CEO at the end of 2025 but remains chairman of the holding company, continued to cut Berkshire's exposure to equities as the market hit record highs.

In what was perhaps a nod to stretched valuations, Berkshire was once again a net seller of stocks, with net sales of approximately $4 billion in Q4. The holding company has now sold more stocks than it has bought for 13 consecutive quarters.

While exact figures will have to wait until Berkshire releases quarterly earnings on February 28, it's estimated that the company was a net seller of stocks to the tune of $14 billion in 2025.

Over the past three years, Berkshire sold more than $190 billion worth of equities. Also noteworthy is that Berkshire hasn't bought back its own stock since May 2024.

With a market cap of more than $1 trillion, Berkshire maintains a sort of "barbell" portfolio, as it holds approximately $280 billion in stocks and more than $380 billion in cash.

Although Berkshire has become more cautious, it did do some shopping in Q4. In addition to buying NYT, the holding company increased stakes in four of its holdings.

Before we get into Berkshire's most recent buys and sells, it's important to know that Buffett has always run a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple alone accounts for more than a fifth of Berkshire's stock portfolio. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 70% of its portfolio value, while the top 10 account for 88%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Also, please note that while Warren Buffett traditionally managed Berkshire Hathaway's largest equity positions, the management structure has officially transitioned.

Buffett has confirmed that CEO Greg Abel now oversees the entire portfolio, supported by investment manager Ted Weschler. Notably, Todd Combs – who previously managed a portion of the portfolio alongside Weschler – departed in late 2025 to take a role at JPMorgan Chase (JPM).

Stocks Warren Buffett is buying

Berkshire boosted its biggest bet in the energy sector, increasing its stake in Chevron (CVX) by almost 7%, or more than 8 million shares. Berkshire, which has owned the Buy-rated Dow Jones stock since the fourth quarter of 2020, now owns more than 130 million shares worth $19.8 billion as of the end of Q4. With a weight of more than 7% in the portfolio, CVX is Berkshire's fifth-largest holding.

In a boost of confidence for Chubb (CB), Berkshire once again upped its stake in the insurer. The holding company, which first bought CB in the first quarter of 2024, increased its position by more than 9%, or almost 3 million shares. With a market value of $10.7 billion as of December 31, CB remains the eighth-largest Berkshire Hathaway holding.

Elsewhere, Berkshire made minor additions to four of its smaller holdings.

Berkshire continued to add to its investment in Domino's Pizza (DPZ), which it initiated in the third quarter of 2024. The holding company increased its stake by more than 12% and now owns nearly 3.4 million shares in the pizza chain worth $1.4 billion as of the end of Q4. However, with a weight of 0.5% in the portfolio, DPZ is Berkshire's 20th-largest position.

As noted above, Berkshire initiated a small stake in NYT, purchasing 5 million shares worth $352 million at the end of Q4. With a weight of about 0.1%, the stake is Berkshire's 30th-largest position.

Lastly, Berkshire made an incremental and essentially immaterial additional investment in Lamar Advertising (LAMR). With a market value of $152 million, LAMR accounts for less than 0.1% of the portfolio.

Stocks Warren Buffett is selling

Buffett continued to pare back Berkshire's position in Apple, which, as recently as 2024, accounted for roughly 40% of its U.S. holdings. The company sold more than 10 million shares over the course of the fourth quarter – a 4% reduction – but Buffett has hardly lost faith in the iPhone maker.

With nearly 228 million shares worth $62 billion as of December 31, AAPL remains Berkshire's largest holding by far, accounting for nearly 23% of the portfolio's total value.

In another reprise from previous quarters, Buffett once again sold Bank of America stock, which has been a major holding since 2017. Berkshire reduced its investment in the nation's second-largest bank by assets by another 9% in Q4, selling more than 50 million shares.

With 517 million shares worth more than $28 billion as of December 31, BAC is Berkshire's third-largest holding, accounting for more than 10% of the portfolio value.

In other sales, Berkshire continued to ease up on DaVita (DVA), its 11th-largest holding, but only by 1.3%. The company also reduced exposure to Constellation Brands (STZ), a stake it initiated at the end of 2024, by 3%.

Other stocks Berkshire pared its stakes in included Aon (AON), Pool Corp. (POOL), Liberty Latin America Class A (LILA) and Atlanta Braves Holdings (BATRK).

Interestingly, Berkshire's most significant reduction in percentage terms was its stake in Amazon.com (AMZN). The conglomerate cut its position by 77%, offloading nearly 8 million shares of the Magnificent 7 stock. With a market value of approximately $525 million, Amazon has tumbled from Berkshire's 17th-largest holding at the end of Q3 to its 27th-largest position as of year-end 2025.

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Our highly experienced Kiplinger Letter team produces regular forecasts on the banking and finance sectors to help you make better decisions about your investment and personal finances (Get a free issue of The Kiplinger Letter or subscribe.) You will always get them first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest forecast… 

The failure of First Republic Bank has once again sparked concerns about the U.S. financial system. Bank regulators have taken control of First Republic and sold most of its operations to JPMorgan Chase & Co (JPM).

This marks the third failure of a large regional bank since mid-March. There are some parallels between First Republic and Silicon Valley Bank, both of which catered to high-net-worth individuals and had an unusually high share of deposits above the $250,000 Federal Deposit Insurance Corporation (FDIC) limit. 

As a result, many depositors moved their funds to larger banks when turmoil hit this spring. A crisis among regional banks still seems unlikely.

What’s next for the banking sector?

While headwinds will continue to plague the industry, vulnerability to rising interest rates varies greatly by bank. Those most at risk: Banks that benefited from a flood of customer deposits during the pandemic and used it to provide cheap mortgages to wealthy customers or buy long-term bonds. But no matter what, bank lending will contract, another source of drag on U.S. economic growth this year. 

Financial regulators want to toughen oversight of nonbanks. The FSOC (Financial Stability Oversight Council) has announced a series of proposals to strengthen the process by which investment managers, insurers, hedge funds and other nonbank financial firms are designated as systemically important. For now, the label, which allows for extra oversight, applies only to the nation’s largest banks.

What rules could change?

A few Trump-era changes would be reversed, specifically, 2019 requirements that forced regulators to wait several years before designating a particular institution as systemically important. The new rules introduce a variety of metrics for regulators to determine whether a company’s distress could threaten U.S. financial stability.

Nonbank financial companies are opposed, arguing the rules should focus on specific activities rather than companies. Three large insurers — AIG, MetLife (MET) and Prudential — plus GE Capital (GE) were initially considered systemically important after the 2008 financial crisis. All four have since been freed from that status.

This forecast first appeared in The Kiplinger Letter. Since 1923, the Letter has helped millions of business executives and investors profit by providing reliable forecasts on business and the economy, as well as what to expect from Washington.  Get a free issue of The Kiplinger Letter or subscribe.   

Bankers have to contend with two big challenges. The first is credit risk. If the economy slides into a recession, borrowers may not be able to make payments on their loans. The second is interest rate risk. Rates can turn against banks in a lot of different ways. For one thing, short-term rates can rise more than long-term rates do, reducing the income that’s generated from the difference between what a bank pays for deposits and what it earns from its loans. For another, as rates rise, the value of debt securities the bank had purchased at lower rates falls.

Usually, it’s the first challenge that gets banks into trouble. That’s what happened to them in 2008 as real estate collapsed. But now-infamous Silicon Valley Bank ran afoul of the second challenge. SVB was an unusual institution that held considerably more debt securities, such as government bonds, than it did loans ($120 billion worth of securities but just $74 billion in loans). The bank was also too focused on a single sector — technology companies and the venture capitalists that supported them — and it had vast amounts of demand deposits ($110 billion), which didn’t require SVB to pay interest but could be pulled out instantly using an iPhone.

Because of the way bank accounting works, SVB did not have to take a hit to its profits as its bonds fell in value, but depositors learned of the problem and started demanding their money. Federal regulators intervened, guaranteeing all of SVB’s deposits — even if they exceeded the $250,000 federal insurance limit, as the vast majority did. The intervention prevented SVB’s bank run from becoming contagious.

The management of SVB made a classic mistake by mismatching short-term liabilities (those demand deposits) and long-term assets (such as debt being held to maturity with an average duration of 6.2 years). Most banks don’t do such things.

In my view, SVB was a salutary warning to the whole banking sector — as well as to regulators, who were at fault for not recognizing sooner that the bank deserved extra scrutiny because it grew so fast (SVB quintupled in size in five years). The system itself is sound and is now getting even sounder, but there’s no doubt that banks are going to tighten their lending requirements, which will further slow the economy.

The bigger risk

A much bigger worry than bank runs is bad debt, the first challenge I mentioned at the outset. Let’s take as an example a typical bank: Glacier Bancorp, based in Montana. At the end of last year, it reported that it has $27 billion in assets, composed mainly of $13 billion in loans — $8 billion of which are for commercial real estate — and $10 billion in debt securities, mainly bundles of mortgages. This edifice of assets sits on top of about $3 billion of the bank’s own capital, which is a higher ratio to assets than most banks have.

Even so, imagine if a severe recession were to strike and a lot of Glacier’s borrowers defaulted on their loans while other borrowers got behind on payments. Glacier can seize real estate or other collateral, but the bank is going to have to take a big loss, depleting its capital. Regulators may demand that Glacier raise more, but that will be difficult in a recession.

I have gleaned a great deal of information from Glacier’s annual report on Form 10-K to the Securities and Exchange Commission. But going through such forms is a lot of work, and some questions remain unanswered, such as whether the $172 million that Glacier has reserved for possible credit losses is enough. (It’s impossible to say, because Glacier doesn’t have to reveal the particulars of its loans to the public.)

There are many banks like Glacier that are heavily invested in commercial real estate, which became a troublesome sector after banks ramped up their lending throughout 2022 — despite the fact that more employees are working remotely. As the Washington Post recently noted, “It seems as if every few days brings news of some big property going into default.” Banks are adding to their loan-loss reserves for commercial loans in anticipation of a mild recession. At the very least, that means lower profits.

Smaller, community banks like Glacier are the backbone of the U.S. economy. Their managers tend to know their customers personally and understand the local business environment. In the wake of the recent SVB fiasco, many investors found these banks guilty of crimes they did not commit. Because of the SVB scare, Invesco KBW Regional Banking, an exchange-traded fund that owns small- and mid-cap banks, fell 21% in March alone.

And community bank stocks could fall more, especially the ones most exposed to commercial real estate. Glacier lost half its value during the great financial crisis of 2008, and the continued lack of visibility into the business of these banks always makes me hesitate. But some bargains are compelling. Not Glacier, which is down only 16% from its high this year, but a bank like Phoenix-based Western Alliance Bancorp, which skidded from $80 at the beginning of February to $36 at the end of March. UBS Securities analyst Brody Preston recommends the stock despite a “relatively cautious view” of the community bank sector as a whole. (Stocks I like are in bold; data is as of March 31.)

Western Alliance trades at a price-earnings ratio, based on a consensus of analysts’ earnings estimates for 2024, of just 3.6. Like most banks, it has losses in its securities portfolio because of higher interest rates, but they are small compared with the bank’s capital, and the proportion of commercial real estate loans is less worrying than that of most other banks. The stock yields 4.1%.

Preston also recommends New York Community Banks, whose stock had dropped nearly 40% from its 2023 high. But the stock has since recovered nearly the entire loss — evidence of what can happen when investors come to their senses. Preston’s third high-conviction buy is Webster Financial, down about 30% from its February peak and trading at a P/E of 6. Webster, the third-largest holding of the Invesco ETF, is based in Stamford, Conn., and yields 4.1%.

Safer bets

Finally, we come to the Big Four, which hold $10 trillion in assets, compared with $3.5 trillion for the other 4,233 banks in the U.S. Seven years ago, the last time I wrote about banks for this column, I recommended all of them. They are, in order of size: JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. The first two roughly doubled in price since my call. Citigroup was flat, and Wells Fargo, buffeted by a scandal, fell by about one-third. I still like all four, especially because they are classified as Systemically Important Financial Institutions and as such must undergo regular stress tests and keep high levels of capital as buffers against the two big challenges. They have attractive dividend yields, ranging from 3.1% to 4.4%.

In one way, these banks have all benefited from the SVB debacle as depositors left smaller banks for the shelter of the SIFIs, which are generally considered too big to fail. The Big Four make up about one-fourth of the assets of Fidelity Select Banking, a mutual fund with a good track record. The rest of the fund’s holdings are in an array of well-chosen institutions, including M&T Bank, a favorite of mine with a dividend yield of 4.4%. Banks are heading into rough waters as the economy slows, but their stocks already reflect tougher times. While they can certainly get cheaper, now is a good time for careful shoppers to start buying.

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here. 

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The banking sector remained in focus Monday after regulators swooped in over the weekend to avert a contagion crisis following Friday's news that Silicon Valley Bank, which services many large technology companies, start-ups and venture capitalists, collapsed. The regional bank owned by SVB Financial Group (SIVB) was closed last week by the California Department of Financial Protection and Innovation.  

Adding to the banking bedlam, Signature Bank (SBNY), a New York-based regional lender focused on the cryptocurrency market, was also shuttered by regulators over the weekend. This came after customers rushed to withdraw deposits from the bank, and officials deemed it a systemic risk to the financial system.

U.S. banking regulators from the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve and the Treasury Department quickly came together over the weekend to develop a plan to limit risk to the banking sector. The efforts included covering all deposits for customers of the failed banks. The Federal Reserve also created the Bank Term Funding Program, a new emergency initiative that will offer short-term loans to banks, credit unions and other depository institutions in order to "provide an additional source of liquidity against high-quality securities, eliminating an institution's need to quickly sell those securities in times of stress." 

Because stock and bondholders in Silicon Valley Bank and Signature Bank will not be protected – and there are no taxpayer costs associated with the plan – it is not considered to be a "bailout."

What happened at Silicon Valley Bank?

The failure of Silicon Valley Bank – which marks the biggest bank to fail since the 2008 financial crisis – came just days after parent company SVB Financial Group sparked debt concerns when it sold Treasuries and other assets for a nearly $2 billion loss and announced a massive stock offering in order to raise capital. 

The bank had bought long-term Treasuries as deposit growth from start-ups soared in 2020 and 2021, but the value of these assets declined as interest rates rose. SIVB failed to find buyers for its Treasuries, which sparked a "bank run," with customers of Silicon Valley Bank simultaneously rushing to withdraw deposits – and creating worries over liquidity.

"The story began when insiders were advising clients to pull their money out, and as is often the case when financial institutions start to falter, people shot first and asked questions later," says Louis Navellier, chairman and founder of Navellier & Associates. "Why should this matter? Because fears are high that problems there may spread to other regional banks."

Will SVB and Signature's Failures Spread?

As for the impact of Silicon Valley Bank's failure on large banks, CFRA Research analyst Kenneth Leon does not see this as a fundamental or liquidity risk. "Large bank deposits have a diversified customer base (especially low-cost consumer deposits) that is sticky and not likely to exit these banks. SIVB had concentration risk to deposits in the technology and venture capital industry," Leon says.

President Joe Biden sought to reassure folks in Monday's early morning speech at the White House. "Look, the bottom line is this: Americans can rest assured that our banking system is safe. Your deposits are safe," Biden said. "Let me also assure you we will not stop at this. We’ll do whatever is needed." 

Although the financial system appears to have averted a crisis, bank stocks are still reeling. First Republic Bank (FRC) was among the day's biggest decliners, losing more than three-quarters of its value at one point in early Monday trading, while regional banks Western Alliance (WAL) and PacWest Bancorp (PACB) also racked up sizable losses.

Note: The FDIC protects depositors' bank accounts by insuring them for a maximum of $250,000. If you have any questions or concerns about your bank's FDIC insurance coverage, just check with the FDIC. And if you want to find a new home for your savings, that is federally insured, our tool — in partnership with Bankrate — will help you find an account that's right for you.

If better-than-expected quarterly results from three of the nation's biggest financial firms are any indication, there might be bargains lurking among bank stocks.

JPMorgan Chase (JPM, $112.92), Wells Fargo (WFC, $43.89) and Citigroup (C, $43.55) marked the unofficial opening of the third-quarter earnings season on Friday, and they did so on an upbeat note. 

Indeed, all three big banks exceeded Wall Street's earnings per share estimates, and by wide margins at that.

Shares in the three lenders rose sharply on the news, even as the broader market sold off. True, the market pretty much always overreacts – both to the upside and downside – in the immediate aftermath of a news event such as earnings.

But the buoyancy exhibited by JPM, WFC and C after their respective earnings reports might just mean that bank stocks have been beaten down beyond reason heading into what is widely expected to be a brutal third-quarter earnings season. 

JPM's Bottom Line Beats the Street

JPM, a component of the Dow Jones Industrial Average and nation's biggest bank by assets, reported a less-than-feared 17% drop in third-quarter profit on Friday, as a jump in interest income cushioned a blow from higher loan loss provisions and a slump in dealmaking due to a worsening economic outlook.

Typically, rising interest rates are good for banks because they can charge consumers more, but the broader risk of an economic slowdown and higher cost of borrowing could cloud the economic outlook and hurt future earnings.

Chief Executive Jamie Dimon said in a statement that American consumers continue to spend and businesses remain healthy.

However, he added there were "significant headwinds immediately in front of us," noting stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine and the fragile state of oil supply and prices.

"While we are hoping for the best, we always remain vigilant and are prepared for bad outcomes."

For the quarter, JPMorgan's profit fell to $9.74 billion, or $3.12 per share. Revenue rose 10% to $32.72 billion, helped by a 22% increase in revenue from fixed income trading.

The bank's adjusted profit was $3.36 per share, well above analysts' average estimate of $2.88, according to Refinitiv data.

Credit Suisse analyst Susan Roth Katzke said "simply put, JPMorgan delivered a solid set of results, from top to bottom."

Citigroup and Wells Fargo Also Join the Beat Parade

Citigroup, the nation's third-largest lender by assets, reported net profit of $3.5 billion, or $1.63 per share, in the three months ended Sept. 30. Analysts on average had expected a profit of $1.42 per share. 

True, the bank reported a 25% year-over-year drop in third-quarter profit, hurt by having to set aside more funds to cover soured loans from a potential economic downturn and a slump in investment banking business. However, signs abound that Citigroup's turnaround efforts are beginning to bear fruit. 

Meanwhile, analysts were also too pessimistic about Wells Fargo. The nation's fourth-largest bank reported a 31% decline in third-quarter profit, hurt by costs related to a fake accounts scandal and higher loan-loss reserves.

Yet, like its fellow bank stocks, WFC beat estimates. On an adjusted basis, the lender earned $1.30 per share, or far more than the Street's forecast for $1.09 per share.

Of these three bank stocks, only WFC is beating the broader market so far this year. Shares in Wells Fargo were off almost 12% for the year-to-date through Oct. 13. JPM and C were down 31% and 29%, respectively, over that span, while the S&P 500 was off 23%.

Meanwhile, Buy Calls Abound on the Street

Anytime a stock sells off that hard, bulls can usually point to valuation as a reason to be constructive on a name. Happily for bulls, these banks' quarterly reports make such arguments even more convincing. 

And not for nothing, but industry analysts were already collectively optimistic about these three bank stocks at their current levels.

JPM carried a consensus recommendation of Buy heading into its third-quarter earnings report, albeit with somewhat mixed conviction. Of the 26 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 10 rated it at Strong Buy, six said Buy, nine had it at Hold and one called it a Strong Sell. 

Citigroup also scored a consensus Buy recommendation, with seven Strong Buy calls, two Buys, 14 Holds and one Strong Sell. 

WFC, meanwhile, sported a consensus recommendation of Buy with high conviction. Of the 26 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 12 called it a Strong Buy, nine said Buy and five called it a Hold. 

And make no mistake, we're already seeing some analyst upgrades on these bank stocks roll in. CFRA Research upgraded WFC to Hold from Sell on Friday thanks to the bank's third-quarter results. 

The Bottom Line

If there was a sliver of a silver lining to be found heading into what is forecast to be the worst earnings season since the height of the COVID-19 pandemic, it was this: Analysts' estimates were so low that companies should be able to trip over them.

If nothing else, results from JPM, C and WFC accomplished exactly that – at least as far as bank stocks are concerned.

Reuters reporters Mehnaz Yasmin, Lananh Nguyen, Niket Nishant and Noor Zainab Hussain contributed to this article.

The Federal Reserve recently announced a much-anticipated hike in interest rates – a 25-basis-point uptick that's expected to be just the first of several this year. The Fed's hawkishness is largely expected to be a boon for the financial sector, including a wide swath of America's regional bank stocks.

The Fed's March rate hike was its first since 2018. But it almost certainly won't be its last. The central bank signaled the possibility of six more hikes in 2022 to fight off inflation, in line with Kiplinger's interest-rate forecast.

Bank stocks can, of course, enjoy a windfall from higher interest rates. The bank compensates the depositor at one interest rate, and then lends that money out at a slightly higher interest rate. The difference, or net interest margin, is an important source of revenue. (The risk, of course, is that too-high rates snuff out loan demand.)

And while some are worried about the possibility of a yield-curve inversion (where longer-term rates fall below shorter-term rates), Morgan Stanley Research Analyst Betsy Graseck says a shallow inversion shouldn't noticeably weigh on the space.

"Banks generated positive loan growth in each of the 11 periods of (two-year/10-year) curve inversions since 1969," she says, adding that she expects loan growth to accelerate from -2% in 2021 to roughly 7% in 2022, even if the curve inverts in line with her views.

Today, we'll look at a group of companies that are more likely than other financial stocks to benefit from rising rates: Namely, regional bank stocks. Regional banks often are more rate-sensitive than their larger peers because they don't have other businesses, such as trading desks, that are less connected to interest rates.

Using the TipRanks database, we have shortlisted four regional bank stocks that are heavily favored by their covering analysts.

Data is as of March 21. TipRanks consensus price targets and ratings are based on analyst opinions issued over the past three months. Stocks listed in reverse order of 12-month price targets.

• Market value: $12.4 billion
• TipRanks consensus price target: $104.31 (11% upside potential)
• TipRanks consensus rating: Moderate Buy

Comerica (CMA, $94.32) is a Dallas-based "super-regional" with more than 430 branches, primarily in Texas, Arizona, California, Florida and Michigan. It's among the 50 largest commercial financial holding companies in the U.S., with nearly $95 billion in total assets, $82.3 billion in total deposits and $49.3 billion in total loans.

Earlier in March, ahead of an RBC Capital Markets Conference, Comerica gave a mid-quarter update to analysts. According to this update, the bank's average loans surged by $300 million to $48.1 billion through Feb. 28. That's the first sequential quarter-over-quarter increase since the second quarter of 2020, according to Wedbush analyst Peter Winter, who considers CMA "one of the most levered banks to an economic recovery as it maintains one of the most asset-sensitive balance sheets in our group."

"Core loan growth trends are improving, and [Comerica] has a significantly higher percentage of cash to earning assets vs peers," adds Winter, who rates the stock at Outperform (equivalent of Buy) with a 12-month price target of $103 per share.

Raymond James analyst Michael Rose (Outperform) echoes Winter's sentiment on the regional bank stock: "Looking ahead, all eyes remain on rate expectations, where Comerica reigns as one of the most asset-sensitive names in the industry."

They're two of seven covering analysts that have issued Buy calls on CMA stock over the past three months, representing half the overall number of analysts that have sounded off on Comerica over that time. See which other analysts are in the CMA Buy camp on TipRanks.

• Market value: $7.2 billion
• TipRanks consensus price target: $61.11 (23% upside potential)
• TipRanks consensus rating: Strong Buy

Synovus Financial (SNV, $49.73) is a Columbus, Georgia-based regional bank stock with around $57 billion in assets. It provides both commercial and retail banking and a full suite of products and services including treasury management, wealth management, private banking and mortgage services.

Jefferies analyst Casey Haire is upbeat about Synovus's concentrated footprint in the Southeastern U.S., which covers most of the major markets there. And while she's less optimistic about the company's recent performance projections, she thinks SNV shares have plenty of upside even if Synovus comes up short.

"Management delivered an upbeat presentation outlining lofty financial targets. These metrics are achievable but require a hawkish Fed, flawless execution of new initiatives and strong cost discipline, which is a lot to ask for in our view," says Haire, who rates the stock at Buy with a $61 price target. "At [11 times estimated 2023 earnings], the bar is low enough that management doesn't need to fully deliver on these metrics, but just make progress, which is very likely in our view given recent loan growth momentum."

Truist's Jennifer Demba and Brandon King (Buy) weigh in, adding that "SNV has grown up into a more sophisticated regional bank that has & will continue to capitalize on M&A disruption opportunities. We are particularly optimistic about further growth prospects in the wholesale bank and treasury and payment services, augmented by new initiatives in corporate & investment banking."

Nine of nine covering analysts surveyed by TipRanks that have sounded off over the past three months have called SNV stock a Buy. Check out their price targets and analysis at TipRanks.

• Market value: $11.6 billion
• TipRanks consensus price target: $102.80 (26% upside potential)
• TipRanks consensus rating: Strong Buy

East West Bancorp (EWBC, $81.41), the holding company behind East West Bank, is a Pasadena, California-based regional with more than $60 billion in total assets and more than 120 branches in the U.S. and China. Indeed, EWBC is focused on serving the immigrant Chinese-American community and Chinese immigrants in the United States.

EWBC is "unique" among regional bank stocks, says Jeffereis' Haire (Buy, $107 price target), as it acts as an "economic gateway between the globe's two largest economies." She also believes EWBC can generate above-average returns in the residential mortgage space because of the bank's "unique affinity relationship" with its Chinese-American customer base.

That said, in Q4, the bank's strongest growth in loans (ex-PPP) came from commercial and industrial (C&I) loans, which grew by 16% annualized.

"EWBC tends to be a less discussed stock among many investors," adds UBS analysts Brock Vandervliet and Vilas Abraham (Buy, $120 price target). "That's unfortunate, as we think EWBC is set to outperform this year with higher loan guidance on top of already top tier growth and efficiency."

Four of the five covering analysts surveyed by TipRanks have called EWBC stock a Buy over the past three months. The lone dissenter was a mere Hold call. See EWBC's stock full analyst forecast on TipRanks.

• Market value: $19.5 billion
• TipRanks consensus price target: $438.57 (41% upside potential)
• TipRanks consensus rating: Strong Buy

Signature Bank (SBNY, $311.15) is a full-service commercial bank with 37 private client offices across the metropolitan New York area, and in Connecticut, California and North Carolina. As of the end of 2021, SBNY boasted more than $118 billion in assets and roughly $106 billion in deposits.

Jeffries analyst Ken Usdin says Signature Bank shares remain a Buy following the recent hike in interest rates. The analyst anticipates four rate hikes this year and another rate hike in 2023. Usdin considers that with higher interest rates to rein in inflation, the yield curve is likely to get steeper – that will allow banks to borrow money at lower rates but lend it out at higher rates.

A steeper yield curve benefits banks, as it means they're borrowing money at a much lower interest rate than the rate they're lending it out at.

For SBNY, according to Usdin, this could lead to loan growth in high double digits while the bank's fees would rise by high single digits.

Signature Bank closed out 2021 with outstanding growth. The bank's net interest income jumped 35.7% year-over-year to $535.9 million on the back of growth in average interest-earning assets. Higher fees and service charges also resulted in non-interest income improving by 38.4% year-over-year to $33.5 million.

Other Wall Street analysts echo Usdin's view. SBNY boasts a Strong Buy consensus rating and an average price target of $438.57 – one of the highest implied upsides among regional bank stocks. You can learn more about the analyst community's views on SBNY via TipRanks' stock forecast.

The rollout of COVID vaccines has raised the prospects of a return to economic normality. That’s good news for financial stocks, which are sensitive to shifts in the economy.

T. Rowe Price Financial Services (PRISX) invests broadly across the sector, in major and regional banks, payment networks, insurers and asset managers. Manager Gabriel Solomon builds his portfolio one stock at a time, digging into each firm’s fundamentals. He invests in companies of all sizes, with a three- to five-year holding period in mind. And he’s on the prowl for bargains: “The fund tends to have a contrarian and deep-value bias,” says Solomon, who works closely with a team of analysts around the globe.

That partiality came in handy in 2020. Financial stocks cratered in the spring amid uncertainties about the virus. Solomon beefed up stakes in Wells Fargo, Fifth Third Bank and Sig­nature Bank, a New York–based commercial bank. He added new positions in Capital One Financial and Huntington Bancshares.

“Every stock has its own story,” says Solomon. Wells Fargo, for one, is still restoring confidence after its fake-account scandal. “The market is underestimating what the company will look like on the other side,” says Solomon. Signature was beaten down due to its exposure to New York real estate, but its balance sheet is “close to pristine,” he says.

Valuation guides Solomon’s buy and sell decisions, but he’ll hold on to fast-rising stocks, such as Visa, as long as long-term growth prospects justify the valuation. Last year, he unloaded Citigroup stock—not because it had risen 57% in 2019, but because of a worrying rise in turnover among middle managers. “It’s important to continue to ask ourselves, What are we missing? Is the situation the same as we thought it was, is it getting better, or is it worse?” says Solomon.

Looking ahead, Solomon is optimistic. Going through the pandemic, the sector survived “an incredible stress test and came out really strong,” he says. Consumer and commercial borrowers overall are in healthy shape, too, which could fuel loan growth. Against this backdrop, a rise in interest rates, a traditional boost to bank profits, would be “icing on the cake,” says Solomon.

Dow Jones stocks won't always keep up in a rising market, but you can't beat them when it comes to stability and defense in a down market.

Case in point: the benchmark S&P 500 is up 22% on a price basis since over past 52 weeks, while the "growthier" but riskier tech-heavy Nasdaq Composite has added more than 30%.

Meanwhile, the Dow Jones Industrial Average, that elite list of 30 more mature industry leaders, rose less than 18% over the same span.

You can blame the Magnificent 7 stocks for much of the Dow's lagging ways in the bull market. Of the mega-cap tech names driving so much of the bull market's returns, only Microsoft (MSFT), Apple (AAPL), Amazon.com (AMZN) and Nvidia (NVDA) can be found in the blue-chip average.

The fact that the Dow is weighted by price rather than market cap limits the Mag 7's contributions on the way up, but then it also helps limit any damage on their way down.

That sort of underperformance hurts, but remember that stocks don't always go up. Take 2026, for example. When the market swooned in March, the Nasdaq was off nearly 11% for the year to date at one point, while the S&P 500 shed more than 7%. The more resilient Dow lost 6% at its year-to-date nadir.

That's generally what the Dow is supposed to do. Half of the average's components are low-beta stocks. That means they tend to lag in up markets, but hold up better when everything is selling off.

This low-beta influence can have advantages for long-term investors. After all, as bright a time as it's been for equity investors over the past several years, downside risks very much remain.

A new international trade regime had already injected uncertainty into markets – and that was before the war with Iran threatened to upend the global economy.

Although fears of an economic slowdown are receding, worries about an AI-fueled bubble are rising. BofA Securities recently cut its year-end price target on the S&P 500 to 7,100. That gives the index implied downside from current levels.

Savita Subramanian, head of U.S. equity and quantitative strategy, noted that seven out of 10 of BofA's bear market indicators have now been triggered – a signal that historically matches levels seen right before market peaks.

Should such a change in market fortunes come to pass ... well, that's where Dow Jones stocks come in.

Dow Jones stocks ranked

This collection of industry-leading companies and dividend growth stalwarts with their fortress-like balance sheets can offer relative stability in tempestuous market times.

From the best Dow dividend stocks to the most widely held blue chip stocks, components of the industrial average occupy top spots in the portfolios of hedge funds and billionaire investors.

Warren Buffett's Berkshire Hathaway (BRK.B), in particular, is a huge fan of select Dow stocks.

To get a sense of which Dow Jones stocks Wall Street recommends at an increasingly uncertain time for equities, we screened the DJIA by analysts' consensus recommendations, from worst to first, using data from S&P Global Market Intelligence.

Here's how the ratings system works: S&P surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Scores between 3.5 and 2.5 translate into Hold recommendations.

Scores higher than 3.5 equate to Sell ratings, while scores equal to or below 2.5 mean that analysts, on average, rate shares at Buy. The closer a score gets to 1.0, the higher conviction the Buy recommendation.

In other words, lower scores are better than higher scores.

See the table below for analysts' consensus recommendations on all 30 Dow Jones stocks, per S&P Global Market Intelligence, as of June 9, 2026.

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This brutal year has been horrendous for those who hold stock in banks and related financial companies. But just as daily life shall improve for society, the same is true for bank shares.

Months after the markets forgave industrials, tech, drugs and many other sectors, judging them to be temporary victims of a natural disaster instead of total roadkill, investors still largely shun banks. Invesco KBW Bank (symbol KBWB, $41), an exchange-traded fund that owns shares of 24 giant U.S. banks, lost 50% from January 2 through March 23—but from then to October 9 regained less than half that loss. Invesco KBW Regional Banking (KBWR, $36), a sibling ETF of 50 midsize and regional banks, is even bloodier. It lost 48% at one point but has barely reclaimed one-third of that damage. (Investments I like are in bold; prices are as of October 9.)

I’m aware that banking is a proxy for the economy and that the cascade of unemployment, business failures and real estate distress hits lenders more directly than it does, say, a fee-collecting money-management business or Apple and Microsoft. And low long-term interest rates are to banks what weak corn prices are to Illinois farmers; the net margin between what banks pay on deposit and earn from their investments is thin.

But common sense suggests that the market’s punishment of bank securities, including bonds and preferred shares, is overdone. Even junk bonds now yield much less than the common shares of many of America’s largest financial institutions. With respect to banks, the stock market has departed from apparent reality.

Better times ahead. Indeed, the word turnaround has started leaking out. That Invesco KBW Bank ETF’s net asset value set a low of $36 late in September; now it is $41. But the NAV was almost $60 before the pandemic. Traders may rotate from overbought big techs to financial wrecks. Regional banks might be takeover targets, a possibility reflected in share prices that are creeping higher. Since the third week of September, shares of Fifth Third Bancorp (FITB, $23), Regions Financial (RF, $13) and Truist Financial (TFC, $43), which was formed by the merger of BB&T and SunTrust, have each rallied more than 20%; each still yields more than 4%.

The men and women who run these banks are big believers in dividends; they have a huge small-investor base. And although the Federal Reserve has ordered big banks to freeze dividends, this is, if anything, reassuring. “Banks are like utilities—completely regulated, with [the Fed] as a shock absorber,” says portfolio manager Aaron Clark at GW&K Investment Management. He sees strong dividend growth resuming post-pandemic. Bank earnings are currently weak, but nobody expects any of the top banks to ask to be rescued. The industry has built up too many defenses since 2009. Loan delinquencies are not out of control, as they were during the financial crisis. And the Fed is standing by with massive aid, if needed.

Another reason for optimism is that yields are creeping up a bit even as the Fed is freezing short-term rates for three years. Numerous analysts assert that by 2021 and 2022, the net interest margin for banks will expand, and the dividend cap will be gone.

Anytime you see a sound bank trading below 1 times book value, it is a bargain. Truist trades at 0.92 times book. People’s United Financial (PBCT, $11) trades at 0.62 times book and yields 6.7%. Last spring, it had $7 billion of loans in forbearance. By September, that was down to $1.6 billion. Even in a down year, profits cover the dividends.

The time to invest in anything out of favor is when the news is still bad but improving from ugly. It just takes patience. At least with banks, you get paid to be patient.

Forget the Dow. Forget the S&P 500. If you're looking for the major index with the most pep in its performance step, look to the Nasdaq-100 – and the growing number of Nasdaq-100 ETFs and mutual funds that allow you to enjoy its fortunes.

The Dow Jones Industrial Average was for decades America's premier stock index, the favored proxy of domestic industry.

Over time, the Dow was eclipsed by the S&P 500 Index. By virtue of tracking 500 companies versus the 30 Dow Jones stocks, the S&P could cover a wider array of firms and better represent the spectrum of U.S. business.

But, from a pure return perspective, both suffer in comparison to the tech-heavy Nasdaq-100 Index. The Nasdaq-100, introduced in 1985, is a select slice of the larger Nasdaq Composite's largest nonfinancial companies.

The index has long been dominated by the best tech stocks, with technology currently accounting for roughly 60% of its total weight.

But it also includes sizeable slugs of high-growth consumer discretionary plays, communication services stocks, and significant health care and industrials exposure too.

The Nasdaq-100 has been a monster outperformer over the long run, delivering a 464% total return (price change plus dividends) during the past decade, easily outdoing the Dow (+213%), S&P 500 (+265%) and the Nasdaq Composite (357%).

The folks over at investment management company Invesco are surely loving it. They sponsor the Invesco QQQ Trust (QQQ), which has allowed investors to take advantage of those rapid gains for decades.

The popularity of QQQ has spawned several related equal-weight, inverse and leveraged products over the years.

More recently, Invesco has leveraged QQQ's success into a number of related investment products tied to the fund (more on those in a moment).

Read on as we examine 14 of the best Nasdaq-100 ETFs and mutual funds. A few of these funds are direct plays on the index itself, while the rest offer various ways to slice, dice and even amplify the Nasdaq-100.

Data is as of July 29.

• Assets under management: $362.4 billion
• Expenses: 0.20%, or $20 annually for every $10,000 invested

Ultimately, the Nasdaq-100 Index is just a set of data. The Invesco QQQ Trust (QQQ) turned that dataset into shareholder returns.

QQQ came to life in March 1999 – unfortunate timing for its first few years, given the dot-com bubble burst shortly thereafter. But, given its total return, long-term investors aren't exactly complaining.

Between 2010 and 2013, QQQ assets had grown from $22 billion to $38 billion. Today, it's more than $360 billion under management, and QQQ has become ubiquitous. You can find it in limited-selection beginner investment apps and robo advisers, and even its options contracts are popular.

As for its innards, the QQQ ETF is a simple index fund that tracks the Nasdaq-100. Top holdings include artificial intelligence juggernaut Nvidia (NVDA) as well as familiar tech names such as Apple (AAPL) and Microsoft (MSFT).

The portfolio also includes consumer giant Amazon.com (AMZN), upstart semiconductor company Broadcom (AVGO), electric vehicle (EV) maker Tesla (TSLA) and social media conglomerate Meta Platforms (META).

It's not quite accurate to call the Nasdaq-100 a broad index because there are so many areas of the market that are quiet or downright missing in QQQ. But it's not a wholesale tech ETF, either.

It is what it is, mostly for better than for worse.

Learn more about QQQ at the Invesco provider site.

• Assets under management: $1.3 billion
• Expenses: 0.35%

Invesco might be the most well-known fund to leverage the Nasdaq-100, but Direxion offers an interesting take on the index, too.

The Direxion Nasdaq-100 Equal Weighted Index Shares (QQQE) invests in an equal-weighted version of the Nasdaq-100. Every March, June, September and December, the index is rebalanced, resetting each of its 100 stocks at 1% of assets.

Their weight will fluctuate depending on how they perform over the next three months, but once the next rebalancing occurs, they're all set back onto equal footing.

That means "bottom" Nasdaq-100 holdings like Micron Technology (MU) and Automatic Data Processing (ADP) have just as much sway as the Apples and Microsofts – and, now, the Nvidias – of the world.

The good news? There's far less single-stock risk. Consider that, with QQQ, three stocks each account for more than 7% of its performance, and there are a few more with healthy single-digit weights.

A bad stretch for any one of those stocks could cancel out the progress of several smaller-weighted constituents, thus dragging on the ETF's returns. Equal-weighting blunts this downside risk.

The bad news? Over the long term, it doesn't allow its winners to ride.

The reason the likes of Apple, Microsoft and Nvidia are overwhelming factors in the major indexes (which tend to be weighted by market capitalization) is simply because they've grown so much. This allows these indexes to increasingly benefit in their upside.

Ultimately, the choice between QQQE and QQQ comes down to what you're comfortable with from a risk perspective.

Learn more about QQQE at the Direxion provider site.

• Assets under management: $56.1 billion
• Expenses: 0.15%

While QQQ is wildly popular, it does have one small shortcoming: Compared to many other broad-market and sector index funds, its annual fees are a touch on the high side.

However, Invesco took care of that in October 2020 by launching the Invesco Nasdaq 100 ETF (QQQM). It's simply a cheaper version of QQQ. At 0.15% annually, it costs five basis points fewer than its sister fund. (A basis point = 0.01%.)

So . . . why not just make QQQ cheaper? The QQQ ETF is an extremely liquid fund that changes hands at a rate of more than 40 million shares daily. As a result, it's able to create tight bid-ask spreads.

That's ideal for traders, who aren't as concerned about low expense ratios as longer-term investors. Rather than drop the fee on QQQ, Invesco created QQQM for buy-and-hold investors who are focused on cost savings.

Invesco can't complain. In fewer than three years, QQQM soaked up more than $56 billion in assets – without kneecapping the QQQ, which continues to expand apace.

As for investors, if you want to buy the Nasdaq-100 Index and hold it, your most significant cost savings will be from the five-basis-point discount in QQQM.

Traders, however, will benefit more from entering and exiting trades with pinpoint precision, which the QQQ's trading volume offers.

Learn more about QQQM at the Invesco provider site.

• Assets under management: $7.7 billion
• Expenses: 0.42%

Before we discuss a few other Nasdaq-100 ETFs, we should point out that the index can support more than just exchange-traded funds.

It might sound funny to call a $7.7 billion mutual fund a "hidden gem." But it's not far from the truth with Victory Nasdaq-100 Index Fund (USNQX).

USNQX, which launched in October 2000, is almost as old as QQQ. But it boasts a small fraction of the ETF's assets.

And it's not for lack of performance: USNQX ranks in the top 10% of funds in its category (large growth) for every meaningful long-term time frame.

The 0.42% expense ratio is more than you'd pay for the Invesco QQQ Trust (and it's much higher than ETFs on average, for that matter).

But it's roughly half the Morningstar category average expense of 0.785%, so USNQX is at least relatively cheap. And it should be, given that this is an index fund.

As you might expect, Victory Nasdaq-100 Index Fund's holdings and breakdown are virtually identical to QQQ. They both just track the index.

Learn more about USNQX at the Victory Capital provider site.

• Assets under management: $74.3 million
• Expenses: 0.20%

The Invesco ESG Nasdaq 100 ETF (QQMG, $38.98) is another of the funds Invesco created to capitalize on QQQ's popularity. Its October 2021 launch also dovetailed with the rising popularity of environmental, social and governance (ESG) investing.

As the name suggests, this ETF invests in Nasdaq-100 stocks that also meet certain ESG criteria. Among the requirements for inclusion:

• meet an ESG Risk Rating Score threshold;
• be deemed compliant with U.N. Global Compact principles;
• meet business controversy-level requirements; and
• not be involved in certain business activities, including alcohol, cannabis, controversial weapons, gambling, military weapons, nuclear power, oil & gas and tobacco.

The ESG filters keep out fewer than 10% of QQQ's holdings – mostly energy stocks but also industrial heavyweight Honeywell (HON).

From a sector perspective, you lose a little exposure to several sectors. The portfolio is concentrated in tech, which represents 62.5% of assets vs 53.3% in QQQ.

It's not a massive difference. But if you're looking for a slightly greener version of QQQ without any oil and gas exposure, QQMG does the trick.

Learn more about QQMG at the Direxion provider site.

• Assets under management: $173.8 million
• Expenses: 0.29%

The Invesco Nasdaq 100 Index Fund (IVNQX), which was launched alongside QQQM, allows investors to track the Nasdaq-100 Index with a mutual fund.

This fund, which will provide similar coverage as QQQ and QQQM, was created to allow Invesco to reach a broader audience. Specifically, it's aimed at retirement accounts, which often can't access ETFs.

Indeed, IVNQX represents Class R6 shares, which are primarily intended for retirement plans, shareholders of omnibus intermediaries that meet certain standards, and institutional investors. In short, it's unlikely you'll be able to access IVNQX with a traditional brokerage account.

Fortunately, your traditional brokerage account will have access to QQQ and QQQM, so it's not an issue.

Learn more about IVNQX at the Invesco provider site.

Call 'em sequels, call 'em spinoffs: The next three funds aren't traditional Nasdaq-100 ETFs. But they're closely related, and they've picked up significant followings of their own. The expense ratios for the following funds range from 0.15% to 0.20%.

First to market, in October 2020, was the Invesco Nasdaq Next Gen 100 ETF (QQQJ). Think of this as the Nasdaq-100's junior varsity squad. While QQQ ETF tracks the 100 largest Nasdaq non-financials, QQQJ tracks the next 100 largest stocks, hence the name.

QQQJ is similar to QQQ in some ways but different in others. For instance, like its older sister fund, QQQJ is heavy in tech, which is the top sector allocation at 39%.

What has set it apart from inception is a much larger position in health care (20.6% to QQQ's 4.8%) and industrials (10.2% to QQQ's 3.5%).

Since inception, the Next Gen's index has traded similarly to the Nasdaq-100 but with periods of clear outperformance and underperformance.

In October 2021, Invesco launched the Invesco ESG NASDAQ Next Gen 100 ETF (QQJG), an ESG-screened version of QQQJ.

The ESG screening doesn't have much of an impact at present, eliminating just a few holdings.

Then, in October 2022, Invesco introduced the Invesco NASDAQ Future Gen 200 ETF (QQQS) – and no, it's not the next 100 stocks up after the Next Gen ETF.

QQQS tracks the Nasdaq Innovators Completion Cap Index, which is made up of 200 small-cap stocks "with the most valuable patent portfolios relative to their total market value as deemed by Nasdaq," according to the fund site.

The index selects its holdings from the Nasdaq Composite, but those holdings can't be Nasdaq-100 or Nasdaq Next Generation 100 stocks.

Learn more about these ETFs at Invesco: QQQJ | QQJG | QQQS

• Expenses: 0.95%

This last group of ETFs is not for the faint of heart. More specifically, these funds are not designed for buy-and-hold investors. Except for ProShares UltraPro QQQ (TQQQ, which has an expense ratio of 0.84%, the expense ratio for these funds is 0.95%.

ProShares offers several ETFs that provide leveraged, as well as inverse, exposure to the Nasdaq-100 Index.

"Leveraged" exposure typically means the fund produces multiple times the performance of an index on a daily basis.

With the ProShares Ultra QQQ (QLD), you're getting two times – or two-times – the daily performance of the Nasdaq-100. That gives you the opportunity to double your gains . . . but also to double your losses. The ProShares UltraPro QQQ provides three-times positive exposure.

"Inverse" exposure means you're getting the inverse of an index's performance. Let's say the Nasdaq-100 Index goes down 1% tomorrow; the ProShares Short QQQ (PSQ) should gain 1% (minus expenses, of course).

You can combine the two ideas – leveraged and inverse exposure – via the ProShares UltraShort QQQ (QID), a negative two-times fund, and the ProShares UltraPro Short QQQ (SQQQ), a negative three-times fund.

We've previously noted that the ProShares Short S&P500 ETF (SH) provides inverse, or negative 1x, exposure to the S&P 500 and is a fairly safe and straightforward hedge against the market. That makes it one of the best bear market ETFs to buy.

The same goes with PSQ, which also offers negative 1x exposure to the Nasdaq-100. If the market heads higher, these products naturally will lose value – but not at an accelerated rate like their leveraged brethren.

However, two-times and three-times products are best left to day traders and the pros. A wrong bet on these products can compound in a hurry.

They're generally too heavy on risk for most individual investors.

Learn more about these inverse ETFs at ProShares: QLD | TQQQ | PSQ | QID | SQQQ

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2020 has been a brutal year for financial stocks. A drop in interest rates, higher pandemic-related insurance claims and the steep economic downturn have crushed the S&P 500 financials sector by about 25% so far this year.

Of course, anytime there is carnage, there is also opportunity to find bargains. And analysts recently have targeted a few financial stocks to buy for their apparent value.

Most recently, banks were pummeled in the wake of the Federal Reserve placing limits on dividends and share buybacks at the nation's biggest banks. However, that doesn't mean all lenders are down for the count. Similarly, credit-fueled consumer spending remains lively. And it's not like every property & casualty insurer is crying in its beer.

To get a sense of where the bargains might lie, we surveyed the S&P 500 for financial-sector stocks with some of the strongest analyst ratings on the Street, according to S&P Capital IQ.

Here's how it works: S&P Capital IQ surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score lower than 2.5 means that analysts, on average, rate the stock as a Buy. Scores of 1.5 and below mean the stock is a Strong Buy. Either way, the closer a stock's score gets to 1.0, the more bullish analysts are about its prospects.

After sorting through the S&P 500, we found stocks ranging from an asset manager to a regional bank to a credit-card issuer. Read on as we look at five of the top-rated financial stocks to buy in these turbulent times.

Share prices, dividend yields, price targets, analysts' ratings and other data are courtesy of S&P Capital IQ as of June 26, unless otherwise noted. Stocks are listed by analysts' average recommendation from worst to best.

• Market value: $18.0 billion
• Dividend yield: 2.8%
• Analysts' average recommendation: 2.08 (Buy)

Investors worried about Ameriprise Financial's (AMP, $146.94) dividend breathed a sigh of relief this spring. The firm, which provides financial planning, asset management and insurance, hiked its quarterly payout in May by 7%, to $1.04 a share from 97 cents.

Credit Suisse's Andrew Kilgerman rates AMP at Outperform (equivalent of Buy), citing the company's success vs. rivals in the financial services industry since it was spun off from American Express (AXP) in 2005. Kilgerman – who raised his price target on Ameriprise's shares from $165 to $200 – notes that the market fails to fully appreciate AMP's cost savings among its various operations.

Ameriprise faces stiff headwinds these days, to be sure. But analysts think it has the wherewithal to come out ahead once they subside. For example, the drop in interest rates hurts brokerage cash fees, which are a key driver of wealth management profits, says William Blair Equity Research. Analysts further caution that annuities should be affected as well, while asset management continues to see net outflows and fee pressures.

"With that said, cash flows should be strong enough to maintain large share repurchases," William Blair writes. "We continue to rate Ameriprise at Outperform given an attractive valuation and high capital return."

Of the 13 analysts covering AMP tracked by S&P Capital IQ, nine put it among financial stocks to buy at either a Strong Buy or Buy rating. Meanwhile, four call it a Hold; no one has a Sell call on it at present.

• Market value: $12.5 billion
• Dividend yield: 4.1%
• Analysts' average recommendation: 1.95 (Buy)

Synchrony Financial (SYF, $21.39) is another financial stock not getting its due from the market, analysts say.

Synchrony issues private-label credit cards for some of the biggest retailers in the U.S. That includes e-commerce giant Amazon.com (AMZN) and Lowe's (LOW), the nation's second-largest home improvement chain.

Shares came under pressure amid fears that the coronavirus pandemic would close stores and cut consumer spending. Although that turned out to be a well-founded fear, Stephens' Vincent Caintic, who rates the stock at Overweight (equivalent of Buy), says the market is underestimating the sales rebound at SYF's retail customers.

Major digital platforms such as Amazon and PayPal (PYPL) account for nearly a third of the company's card interest and fees, Caintic says, and growth in that segment remains pretty healthy. Mass merchants such as Lowe's and Walmart's (WMT) Sam's Club are likewise doing well.

Credit Suisse says the company's new partnership with Verizon (VZ) is a significant tailwind, too.

"SYF management has been very excited and committed to this launch and this portfolio," writes Credit Suisse, which rates the stock at Outperform. "We believe this card offers attractive rewards for the value to gain traction among 150 million Verizon customers in the U.S."

• Market value: $9.9 billion
• Dividend yield: 6.7%
• Analysts' average recommendation: 1.86 (Buy)

Citizens Financial (CFG, $23.16) took a pounding June 26 – just like most bank stocks – after the Federal Reserve placed limits on dividends and share buybacks at the nation's biggest banks. As a large regional lender, CFG dodges that bullet, but concerns remain about the dividend.

Keefe, Bruyette & Woods analysts believe the recent stress tests will not impact common dividend payouts for the large regional banks in the third quarter, but there's a heightened risk of cuts in the fourth quarter. So of all the financial stocks on this list, CFG is the one to handle with the most care over the coming months.

Nonetheless, analysts as a group remain bullish on Citizens Financial. UBS raised its rating to Buy in May, citing CFG's "more diversified loan book, self-help opportunities, and considerable valuation discount."

Piper Sandler rates CFG at Overweight, noting that most large regional banks "appear to be witnessing some return to normalcy in terms of customer spending activity as compared to spring lows."

Banks also are benefiting from the cost savings associated with an increase in digital banking. "We expect in coming quarters to hear more details regarding banks' ability to close branches at a faster clip to save costs," Piper adds.

Eight analysts call CFG a Strong Buy, eight say Buy and five rate it at Hold. Their average price target of $29.31 gives the stock implied upside of more than 26% in the next 12 months or so.

• Market value: $13.4 billion
• Dividend yield: 3.5%
• Analysts' average recommendation: 1.82 (Buy)

Shares in Hartford Financial (HIG, $37.44) have been slammed in 2020, but analysts say the pain has been way overdone.

"We think HIG's valuation reflects that investors are overly concerned with pandemic-related insurance exposures," writes Piper Sandler, which rates the investment and insurance company's shares at Overweight.

"The Hartford in recent years has been one of the most profitable insurers in our coverage universe," Piper's analysts add, noting that HIG has limited exposure to business interruption claims from the pandemic.

Piper is bullish about the company's dividend, too. "The Hartford has paid a dividend for many years and its current payout is less than 30% of our projection of 2020 operating earnings," Piper analysts say.

This news should also help investors sleep better at night: AM Best recently affirmed its A+ (Superior) financial strength rating on HIG.

"The ratings of the Hartford Insurance Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management," AM Best says.

Of the 17 analysts covering the stock tracked by S&P Capital IQ, eight rate it at Strong Buy, four say Buy and five call it a Hold. They expect HIG to generate average annual profit growth or more than 5% over the next three to five years.

• Market value: $49.5 billion
• Dividend yield: 1.3%
• Analysts' average recommendation: 1.52 (Buy)

Market volatility and a huge influx of first-time traders spells good news for exchange companies such as Intercontinental Exchange (ICE, $90.40), whose holdings include the New York Stock Exchange and its various equity and bond markets.

Deutsche Bank has ICE at the top of its list of financial stocks to buy, thanks to its "recurring revenue-based" model. It's also "benefiting from sustained strength in retail trading activity in cash equities and equity options," DB analysts write.

Citigroup echoes those sentiments, noting that even after the market turmoil settles down, ICE's fundamentals remain strong. Citi analysts raised their rating on ICE in May to Buy from Neutral, citing the "strength of its full-service ecosystem" and strong balance sheet.

ICE and its rivals should also get a boost from initial public offerings once the market returns to some semblance of normalcy, as there should be ample pent-up demand.

Twelve analysts tracked by S&P Capital IQ rate the stock at Strong Buy and seven say it's a buy. Two analysts call it a Hold. They forecast ICE to deliver average annual earnings growth of more than 10% over the next three to five years, while their average price target of $103.43 gives the stock implied upside of about 14% in the next year or so.

Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), wasn't doing much buying during the first quarter, which ended just before the economic impact of the coronavirus really set in. But he sure did a lot of selling.

Buffett has dumped shares in 21 stocks since the start of the year. For the most part, the Oracle of Omaha has merely trimmed BRK.B's positions. Reducing risk and raising cash are certainly prudent moves when facing the unprecedented uncertainty that we are now. In a few cases, however, Buffett sold the great majority or entirety of Berkshire's positions in some of its biggest and best-known holdings.

On the other side of the ledger, Buffett made just one buy in the quarter, adding a modest amount to a well-known regional bank.

We know what the greatest long-term investor of all time has been doing because the U.S. Securities and Exchange Commission requires all investment managers with more than $100 million in assets to file a Form 13F quarterly to disclose any changes in share ownership. These filings add an important level of transparency to the stock market and give Buffett-ologists a chance to get a bead on what he's thinking.

When Buffett starts a new stake in some company, or adds to an existing one, investors take that as a vote of confidence. On the other hand, if he pares his holdings in a stock, it can spark investors to rethink their own investments. The fact that Buffett was fearful rather than greedy as the market plunged in Q1 underscores how challenging it is to make investing decisions these days.

Here's the scorecard for what Berkshire Hathaway bought and sold during the three months ended March 31, 2020, based on the most recent 13F that the company filed on May 15. And remember: Not all "Warren Buffett stocks" are actually his picks. Some smaller positions are believed to be handled by lieutenants Ted Weschler and Todd Combs.

Current price data is as of May 15. Holdings data is as of Feb. 14. Sources: Berkshire Hathaway’s SEC Form 13F filed May 15, 2020, for the reporting period ended March 31, 2020; and WhaleWisdom.

• Action: Added to stake
• Shares held: 9,197,984 (+6% from Q1 2019)
• Value of stake: $880,431,000

PNC Financial Services (PNC, $97.25) claims the honor of being the only stock Warren Buffett bought more of in Q1 2020 … that he stuck with. What's more, he hiked Berkshire Hathaway's stake in the regional lender by 6% at a time when he's been a huge net seller of bank stocks. (We'll get to that momentarily.)

Berkshire first started investing in the nation's sixth-largest bank by assets during the third quarter of 2018. Buffett upped Berkshire Hathaway's stake by another 4% in Q1 2019. And he added another 526,930 shares to start this year. BRK.B is now PNC's seventh-largest investor with 2.2% of the bank's shares outstanding.

Buffett has long been comfortable with investing in the banking business. At the 1995 Berkshire Hathaway annual meeting, he said the industry "falls within our circle of competence to evaluate."

The uncertainties unleashed by the coronavirus pandemic appear to have changed Buffett's estimation of this sector of the economy, however.

• Action: Reduced stake
• Shares held: 74,681,000 (-0.4% from Q4 2019)
• Value of stake: $1,551,872,000

Warren Buffett shaved a little bit off Berkshire Hathaway's stake in General Motors (GM, $22.63), the world's fourth-largest auto manufacturer by production, in the first quarter.

BRK.B now holds 74.7 million shares after selling off about 319,000 during the first three months of the year. That total equates to 5.2% of GM's shares outstanding, making BRK.B the car company's fifth-largest stockholder.

GM has always looked like a classic Buffett value bet. General Motors is an iconic American brand and a play on the long-term growth of the U.S. economy. Buffett also likes CEO Mary Barra, singing her praise on multiple occasions. At one point, he said, "Mary is as strong as they come. She is as good as I've seen."

But General Motors hasn't returned the favor. Berkshire paid an estimated average price per share of $31.82 when he initiated his position during the first quarter of 2012. Shares now trade in the low $20s, widely underperforming the market in that same time.

Adding injury to injury: GM also suspended its dividend in late April, depriving Berkshire of any income from those shares.

• Action: Reduced stake
• Shares held: 14,949,031 (-0.5% from Q4 2019)
• Value of stake: $236,195,000

Warren Buffett trimmed BRK.B's stake in Suncor Energy (SU, $16.15), but only by a mere 70,000 shares, or about half a percent. As we'll see later, that's nothing compared to what he did to another of his few holdings in the energy sector.

Suncor is as widely exposed to the crash in oil prices as a company can be. Canada's largest integrated energy company has operations in oil sands developments, offshore oil production, biofuels and even wind energy. It also sells its refined fuel via a network of more than 1,500 Petro-Canada stations.

Berkshire increased its stake in SU by 40% during the final quarter of 2019 before making a slight reduction in Q1 2020. It's still a small holding, representing about 0.14% of the Berkshire equity portfolio's worth, according to data from S&P Global Market Intelligence.

Income investors should be aware that Suncor has raised its annual payouts for 18 consecutive years, making it a member of the Canadian Dividend Aristocrats.

• Action: Reduced stake
• Shares held: 533,300 (-0.7% from Q4 2019)
• Value of stake: $1,039,786,000

Berkshire Hathaway cut its stake in Amazon.com (AMZN, $2,409.78) by less than 1% earlier this year, which means he lightened up just before shares in the e-commerce giant went on a hot run.

AMZN is up 24% since the end of the first quarter, boosted by the enormous demand unleashed by consumers sheltering in place because of COVID-19.

Not that it matters much. Berkshire was an insignificant investor in AMZN even before selling 4,000 shares in Q1, with just 0.1% of Amazon's shares outstanding.

Interestingly, the Amazon holding isn't one of Buffett's ideas. In 2019, Buffett told CNBC: "One of the fellows in the office that manage money ... bought some Amazon."

Buffett, however, has long been an admirer of Amazon CEO Jeff Bezos, he admitted in an interview. He also said he wished he had bought the stock sooner. "Yeah, I've been a fan, and I've been an idiot for not buying (AMZN shares)," Buffett told CNBC.

• Action: Reduced stake
• Shares held: 30,850,985 (-0.8% from Q4 2019)
• Value of stake: $975,508,000

Buffett also took a little off the top of Berkshire's position in Liberty Sirius XM Group Series C (LSXMK, $31.44).

But that doesn't make the holding any less complicated.

Liberty Media has for years held a large stake in Sirius XM. But in 2015, the company actually recapitalized, offering (among other things) several tracking stocks that allowed investors to enjoy in the performance of Liberty's Sirius XM investment directly rather than get it piecemeal through Liberty Media itself.

Thus, Buffett was exposed to Sirius XM before Berkshire directly invested in SIRI shares in Q4 2016.

But over time, he has bought more of the tracking stock; the overall body of tracking stock currently represents Liberty's roughly 70% stake in Sirius XM. The Berkshire Hathaway portfolio now holds more than 45 million shares of Liberty Sirius XM Group Series A (LSXMA, $31.80) and LSXMK combined. That sum is a little smaller than it was a quarter ago, as Buffett dumped 240,000 Series C shares representing a tiny slice of his stake.

Berkshire is the largest institutional shareholder in each class, holding 4.2% of Liberty Sirius XM's A shares, and 8.7% of the C shares.

Combined with his SIRI stake, the Oracle of Omaha holds three different investments in Sirius XM. Continue reading for more details.

• Action: Reduced stake
• Shares held: 24,070,000 (-0.8% from Q4 2019)
• Value of stake: $415,689,000

Berkshire Hathaway snipped its stake in Axalta Coating Systems (AXTA, $19.70) during the first three months of the year. Buffett sold 194,000 shares, or less than 1% of Berkshire's stake.

Nonetheless, Berkshire remains Axalta's largest investor, holding 10.2% of the shares outstanding.

Axalta joined the ranks of the Buffett stocks in 2015, when Berkshire Hathaway purchased 20 million shares in AXTA from private equity firm Carlyle Group (CG). The stake makes sense given that Buffett is a longtime fan of the paint industry; Berkshire Hathaway bought house-paint maker Benjamin Moore in 2000.

Axalta, which makes industrial coatings and paints for building facades, pipelines and cars, is the belle of the ball when it comes to mergers and acquisitions suitors. The company has rejected more than one buyout bid in the past, and analysts note that it's a perfect target for numerous global coatings companies.

• Action: Reduced stake
• Shares held: 643,022 (-0.8% from Q4 2019)
• Value of stake: $203,440,000

Berkshire Hathaway cut its stake in biotechnology giant Biogen (BIIB, $316.60) by 5,425 shares in Q1. The remaining position is worth more than $203 million, which isn't much in the grand scheme of Buffett's holdings.

BIIB accounts for just 0.12% of Berkshire Hathaway's equity portfolio. At the same time, the holding company is Biogen's 32nd largest stockholder with just 0.4% of the biotech's shares outstanding.

While Buffett has a history of making bets on the health care sector, the small stake size signals this might be an idea from lieutenants Ted Weschler or Todd Combs.

Either way, it has been a good holding in 2020. BIIB is up about 7% for the year-to-date vs. a gain of less than 1% for the Nasdaq Composite. It also helps that Biogen reliably generates several billion dollars each year in free cash flow.

• Action: Reduced stake
• Shares held: 42,789,295 (-1% from Q4 2019)
• Value of stake: $384,248,000

Warren Buffett also liquidated a bit of Teva Pharmaceutical (TEVA, $11.21) in Q1, shaving the position by 1% or 460,000 shares.

Berkshire Hathaway first invested in TEVA during the fourth quarter of 2017. At the time, the Israel-based drug manufacturer looked like a distressed value play. A bloated balance sheet, mass layoffs and the looming expiration of drug patents made Teva about as out of favor as they come.

By the time Buffett stepped in, Teva shares were off about 70% from their mid-2015 peak. Berkshire then doubled his stake in Teva during the first quarter of 2018, when shares looked really cheap.

TEVA is off about 8% in 2020 – not a bad performance, given 11% losses for the S&P 500 – and still looks cheap, trading at just 4.3 times next year's earnings.

As of March 31, BRK.B owned 3.9% of Teva's shares outstanding.

• Action: Reduced stake
• Shares held: 12,815,613 (-1% from Q4 2019)
• Value of stake: $2,307,964,000

You can add Verisign (VRSN, $217.25) to the long list of stocks Buffett turned to for an incremental infusion of cash last quarter. BRK.B sold 137,132 shares, or 1% of its stake. The holding company now owns 12.8 million shares, or 11.1% of VRSN's shares outstanding.

Verisign – an internet infrastructure service company that quite literally keeps the world connected online and acts as a domain registry for the .com, .net and other top-level domains – exemplifies Buffett's love for companies with deep moats. And it continues to pay off.

VRSN is up nearly 13% in 2020, and it has raced ahead 460% since Buffett bought the stock at the end of 2012, more than tripling the S&P 500's 134% total return.

• Action: Reduced stake
• Shares held: 38,095,570 (-1% from Q4 2019)
• Value of stake: $2,897,549,000

Buffett took a bit of profit in DaVita (DVA, $79.25) in the first quarter, paring BRK.B's stake by 470,000 shares, or 1%.

That hardly makes a dent in Berkshire's position in the kidney care provider and dialysis center operator. Its stake of 38.1 million shares represents more than 31% of the company's shares outstanding. It's the top stockholder in the firm by a wide margin.

Berkshire disclosed its initial position in DaVita during 2012's first quarter. Given that DVA was a large position of Ted Weschler's Peninsula Capital in his pre-Berkshire days, it wasn't unreasonable to assume that it was his pick. Weschler confirmed as much in 2014.

DaVita serves patients via more than 3,000 dialysis centers in the U.S. and nine other countries. Aging baby boomers and a graying population in many developed markets should provide a strong, secular tailwind.

• Action: Reduced stake
• Shares held: 19,310,000 (-2% from Q4 2019)
• Value of stake: $318,808,000

Liberty Global Class A (LBTYA, $21.83) and Liberty Global Class C (LBTYK, $21.30) also became a very modest source of new funds in the first quarter.

Berkshire cut its holdings of Class A shares by 2% but left its Class C shares untouched. Berkshire remains the second-largest holder of LBTYA at 3.1% of shares outstanding, and the No. 10 holder of LBTYK at 1.2%.

Bets on Liberty Global are bets on the communications and media empire created by billionaire dealmaker John Malone. Liberty Global says it's the world's largest international TV and broadband company, with operations in seven European countries.

But it's more than just those core businesses: LBTYA also has a venture arm that invests in 40 companies in content, technology, internet and distribution, and it also boasts ownership in the sustainable-energy racing series Formula E.

• Action: Reduced stake
• Shares held: 132,418,729 (-2% from Q4 2019)
• Value of stake: $654,149,000

Back to Sirius XM (SIRI, $5.34). The satellite radio operator and owner of streaming music company Pandora claims more than 100 million listeners. It's also another stock pick with a connection to John Malone. Malone is chairman of Liberty Media, which owns a 72% stake in Sirius XM.

Buffett trimmed BRK.B's stake in SIRI by 2%, or 3.9 million shares, in Q1. It remains the company's third-largest stockholder with 3% of its shares outstanding. BlackRock (3.1%) is the No. 2 shareholder.

As Kiplinger has noted, it's possible that all of Berkshire's investments in companies that are somehow tied to Malone's truly Byzantine corporate structure could very well be the responsibility of one of Buffett's portfolio managers. Liberty Media was a large position held by Ted Weschler's Peninsula Capital in his pre-Berkshire days.

While Sirius XM's business model is being hit on two fronts – plunging auto sales and declining ad revenue – the company beat first-quarter revenue and profit guidance, and CEO Jim Meyer says he expects Sirius to "continue to generate substantial positive free cash flow." Nonetheless, the company withdrew full-year 2020 guidance.

• Action: Reduced stake
• Shares held: 2,630,792 (-3% from Q4 2019)
• Value of stake: $27,676,000

Berkshire has made several de facto bets on legendary pay-TV mogul John Malone. Liberty Latin America Class A (LILA, $9.08) and Liberty Latin America Class C (LILAK, $8.88) shares are the smallest of those, and they got a little smaller during the first quarter of 2020, as Buffett shed roughly 84,000 Class A shares.

Liberty Latin America provides cable, broadband, telephone and wireless services in Chile, Puerto Rico, the Caribbean and other parts of Latin America. Liberty Global, the multinational telecommunications company in which Berkshire also holds a stake, issued tracking stock of its Latin American operations in 2015. It then spun off those operations entirely in 2018.

The appeal of Malone-backed properties to Buffett and his lieutenants is plain to understand: Game knows game.

• Action: Reduced stake
• Shares held: 20,128,000 (-3% from Q4 2019)
• Value of stake: $323,860,000

Berkshire Hathaway sold 675,000 shares in Synchrony Financial (SYF, $16.54), or about 3% of its stake, in Q1 2020. It now owns 3.4% of Synchrony Financial's shares outstanding, which makes it the firm's eighth-largest shareholder.

SYF jibes with Buffett's affection for credit-card companies and banks. Synchrony, a major issuer of charge cards for retailers, was spun off of GE Capital in 2014. It's both a lender and a payments processor – like Buffett's beloved American Express (AXP) – but it caters to customers who skew more toward the middle and lower end of the income scale.

Berkshire first jumped into SYF during the second quarter of 2017, paying an estimated price per share of $30.02. Since the end of Q2 2017, the stock has lost more than 40% of its value, versus a 25% positive total return for the S&P 500 during that time. That includes a nasty 54% spill so far in 2020.

• Action: Reduced stake
• Shares held: 57,714,433 (-3% from Q4 2019)
• Value of stake: $5,196,030,000

With the exception of PNC, Buffett did a bit of a number on BRK.B's bank stocks in Q1. A rapidly deteriorating economic situation and unprecedented uncertainty makes the bull case for the sector opaque at best.

To that end, BRK.B cut its stake in JPMorgan Chase (JPM, $85.90), the nation's largest bank by assets, by about 1.8 million shares, or roughly 3% of its stake. Nonetheless, Warren Buffett's holding company still holds 1.9% of shares outstanding to rank as the bank's sixth-largest shareholder.

Buffett, an unabashed fan of CEO Jamie Dimon, previously had been big on JPMorgan's shares. BRK.B upped its stake by 40% in the fourth quarter of 2018 and again by 18% in the first quarter of 2019.

• Action: Reduced stake
• Shares held: 1,920,180 (-84% from Q4 2019)
• Value of stake: $296,841,000

Buffett took a sledgehammer to BRK.B's stake in Goldman Sachs (GS, $171.87) in Q1. Indeed, the holding company dumped the great majority of its shares in the Dow component.

Berkshire first picked up its stake in Goldman during the 2008 financial crisis when it threw the capital-starved bank a lifeline. Buffett later parlayed the original investment into what at one point was a $3.8 billion, 5.1% stake in GS that made BRK.B its fourth-largest shareholder.

However, in Q1 2020, the holding company dumped more than 10 million shares, or about 84% of its stake, in Q1 2020 to give GS a severely diminished position among Buffett's stocks.

It was the second straight quarter that Buffett reduced BRK.B's holdings in the Wall Street investment bank. Even before the coronavirus crisis hit, Buffett saw something he didn't like. He sold nearly a third of his holdings during Q4 2019 to make GS account for just 1.1% of BRK.B's portfolio. After the Q1 flush, GS now accounts for a mere 0.2% stake in Berkshire Hathaway's equity holdings.

• Action: Exited stake
• Shares held: 0 (-100% from Q4 2019)
• Value of stake: $0

It was a small, almost orphan of a position to begin the year, and now it is no more. Buffett sold the entirety of BRK.B's stake in Travelers (TRV, $90.31) in Q1.

TRV, an insurance giant and Dow stock always seemed a natural fit for BRK.B, at least on the surface. Insurance, after all, is the holding company's core business. In addition to TRV, Berkshire Hathaway has a stake in insurer Globe Life (GL) and counts numerous insurer companies as wholly owned subsidiaries. Geico, General Re and United States Liability Insurance Group are just three companies BRK.B owns as part of its sprawling insurance empire.

And Travelers, a component of the Dow Jones Industrial Average with a modest dividend yield of 3.7%, has the kind of pedigree and income stream Buffett favors.

But BRK.B doesn't really need more exposure to the insurance industry, even in the best of times. And these, of course, are nowhere near the best of times.

Whatever the reason, Buffett unloaded all of Berkshire Hathaway's 312,379 shares in TRV.

• Action: Added to stake
• Shares held: 0 (-100% from Q4 2019)
• Value of stake: $0

Buffett has been paring Berkshire'ss stake in Phillips 66 (PSX, $70.93) for some time. And now, the holding company is out for good. BRK.B sold all of its 227,436 shares in the oil and gas company.

Perhaps it was only a matter of time. Buffett was a big seller of PSX all through 2019. In the first quarter of last year alone, he pared Berkshire's stake by 53%. It was a somewhat surprising turn of events at the time, given that Berkshire was Phillips' largest shareholder with 9.8% of all shares outstanding as recently as early 2018.

Buffett was characteristically mum on his reasons for the sales.

With the end of the PSX position, Suncor and Occidental Petroleum (OXY) are the only energy-sector stocks left in BRK.B's portfolio.

• Action: Exited*
• Shares held: 0 (-100% from Q4 2019)*
• Value of stake: $0*

As was well documented at the time, Buffett dumped the entirety of Berkshire's stakes in the nation's four largest air carriers because of the coronavirus crisis.

The sales of American Airlines (AAL, $9.04), Delta Air Lines (DAL, $19.19), Southwest Airlines (LUV, $23.87) and United Airlines (UAL, $19.92) actually took place after the close of Q1, in early May. (Hence the asterisks.)

During the first quarter, Buffett actually added to his stakes in Delta and United in the first quarter. By April, however, it was clear that Buffett's rationale for buying shares in airlines – a sector he once excoriated – was dead.

"I don't know whether two or three years from now that as many people will fly as many passenger miles as they did last year," Buffett said about the moves. "They may and they may not, but the future is much less clear to me."

Shares in the four air carriers have lost anywhere from 50% to 75% so far in 2020.

* Moves announced during Q2 rendered Berkshire's Q1-end positions moot.

Bank earnings season kicked off Friday, April 12, with first-quarter reports from JPMorgan Chase (JPM) and Wells Fargo (WFC). As more reports roll in, investors will be keen to see what a pause in interest-rate hikes and a potential slowdown in economic growth could mean for the sector going forward.

After all, those and other concerns have made financial stocks a market laggard so far this year. The Standard & Poor’s 500-stock index is up a hot 15% for the year through April 10. The financial sector, however, gained just 11% over the same span. The bank subsector was up a bit more than 12%.

But the financial sector might be ready to pivot. Analysts surveyed by Refinitiv expect the sector to post year-over-year Q1 earnings growth of just 2.9%. That doesn’t sound like much, but it’s encouraging when you consider that FactSet estimates the S&P 500’s profits will contract by 4.2% for the quarter.

Which bank stocks are analysts most excited about right now? We screened the Russell 1000 Index for the top-rated small, midsize and large bank stocks. S&P Global Market Intelligence surveys analysts’ ratings on stocks and scores them on a five-point scale, where 1.0 equals “Strong Buy” and 5.0 means “Strong Sell.” Any score of 2.0 or lower means that analysts, on average, rate the stock a “Buy.” The closer the score gets to 1.0, the better.

Here are the 12 best-rated bank stocks as earnings season gets into gear. This group is broken down into the four most-loved stock picks in the small-, mid- and large-cap spaces.

Data is as of April 10, 2019. Companies are listed by strength of analysts’ buy recommendations, from lowest to highest. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ ratings are provided by S&P Global Market Intelligence. Expected earnings dates are provided by Briefing.com.

• Market value: $5.1 billion
• Dividend yield: 2.3%
• Analysts’ average recommendation: 1.44

Analysts believe Popular (BPOP, $53.05) is poised for steady-if-not-spectacular growth. The regional bank serving Puerto Rico, New York, New Jersey and Florida is expected to deliver average earnings growth of 5% a year for the next half-decade.

Add in the healthy dividend yield, and you have a stock that Wall Street equity researchers are firmly behind. Analysts at Sandler O’Neill & Partners – which specializes in financial-sector analysis – rate BPOP stock at “Buy.” They say the bank’s “capital position remains extremely robust” and that “BPOP is set up for a very nice 2019.”

Popular’s stock is up about 12% for the year-to-date, lagging the S&P 500 by 3 percentage points. The next potential catalyst is its Q1 earnings report, which is expected to come out ahead of the April 18 market open.

• Market value: $4.2 billion
• Dividend yield: 1.4%
• Analysts’ average recommendation: 1.5

Regional financial stock Sterling Bancorp (STL, $19.88) is having a hot year. Shares are up more than 20% so far in 2019, and analysts think there’s more outperformance to come.

With an average recommendation score of 1.5, the Street leans heavily toward “Strong Buy” and “Buy” calls. Sandler O’Neill analysts base their own “Buy” call partly on the stock’s “compelling valuation.” They also laud the company’s ability to keep a cap on costs: “Expense control has been excellent.”

The regional bank with locations primarily in the greater New York area is expected to deliver annual average earnings growth of 5% for the next five years. Sterling’s next quarterly update should come after the April 24 market close.

• Market value: $4.3 billion
• Dividend yield: 1.2%
• Analysts’ average recommendation: 1.5

Shares in Pinnacle Financial Partners (PNFP, $55.86) are on a tear so far in 2019. PNFP is up more than 21% for the year-to-date, easily outpacing the broader market. Analysts believe the regional bank – which serves Tennessee, North Carolina, South Carolina and Virginia – is set to deliver outsize earnings growth.

Sandler O’Neill analysts, who rate the stock at “Buy,” note that “new revenue producers will continue to fuel future growth.”

The analyst consensus is for earnings to increase at an average annual pace of 32% for the next five years, according to Refinitiv data. No wonder Wall Street’s pros are so bullish on this bank stock, which is set to report its quarterly results after the April 15 close.

• Market value: $4.5 billion
• Dividend yield: N/A
• Analysts’ average recommendation: 1.29

Shares in Western Alliance Bancorporation (WAL, $43.32) – a regional bank with branches in California, Arizona and Nevada – tumbled in March after the Federal Reserve indicated that it wouldn’t raise interest rates again in 2019. Low rates put pressure on banks’ net interest margins, or the difference between what a lender pays for deposits and charges for loans. Thus, WAL was hardly alone in reacting negatively.

Analysts as a group remain bullish on Western Alliance’s stock, however, which has rallied sharply in recent weeks. Indeed, WAL is up 11% since bottoming on March 22. Standard & Poor’s 500-stock index has gained 3% over the same time frame.

The regional bank is forecast to generate average annual earnings growth of 7.5% over the next five years, according to data from Refinitiv. Its quarterly results are expected to come after the April 22 closing bell.

• Market value: $14 billion
• Dividend yield: 4.2%
• Analysts’ average recommendation: 2.39
• Huntington Bancshares (HBAN, $13.30) – a regional bank based in Columbus, Ohio, with branches mainly concentrated in the Midwest – offers a generous dividend yield and high forecast dividend growth.

Concerns about stagnant interest rates and slower economic growth have some analysts leaning toward being more cautious on the stock. Their average recommendation of 2.39 sits between the “Buy” and “Hold” camps.

Analysts expect HBAN to generate average earnings growth of 8% a year for the next five years, according to a survey by Refinitiv. That should help fund a dividend that has doubled from 7 cents per share quarterly to 14 cents since late 2015.

Huntington’s next earnings report is due out ahead of the April 25 market open.

• Market value: $16.4 billion
• Dividend yield: 4.2%
• Analysts’ average recommendation: 2.0

With more than 1,100 branches across 15 states and about $130 billion in assets, Cleveland-based KeyCorp (KEY, $16.39) is one of the largest regional banks in the nation. A hefty dividend yield north of 4% and solid growth prospects have analysts convinced that solid returns still lie ahead.

Zacks Equity Research notes that KeyCorp has been driving growth through acquisitions. Since 2016, the bank has bought out First Niagara Financial Group, HelloWallet and Cain Brothers & Company. Most recently, it closed on its acquisition of Laurel Road Bank’s digital lending business in early April.

Analysts forecast the bank to generate average annual earnings growth of 6.7% for the next five years. Add in the dividend yield of more than 4% and KEY gets an average analyst recommendation of “Buy.”

KeyCorp is expected to report earnings on the morning of April 18.

• Market value: $12.4 billion
• Dividend yield: N/A
• Analysts’ average recommendation: 1.67
• SVB Financial Group (SIVB, $237.27) is a different kind of animal.

SVB, which stands for Silicon Valley Bank, is a go-to bank for tech-sector startups. In addition to commercial banking, the firm offers services ranging from venture capital and private equity to private banking and wealth management.

Sandler O’Neill analysts have a “Buy” rating on this bank stock partly because of its “unique franchise.” The analysts also like SIVB’s “above-average growth and superior deposit base.”

SIVB is up 25% for the year-to-date, which beats the S&P 500 by about 10 percentage points. Despite the run-up in price, analysts have kept their bullish stance. Their average recommendation of 1.67 sits easily on the “Buy” side of the scale. We’ll see if that continues following its next earnings report, due out after the market closes on April 25.

• Market value: $15.7 billion
• Dividend yield: 3.8%
• Analysts’ average recommendation: 1.62

Outsize long-term earnings growth and a generous dividend yield have analysts plenty bullish on Citizens Financial Group (CFG, $34.11), the 13th-largest bank in the U.S.

The regional financial company best known for Citizens Bank branches throughout New England, the Mid-Atlantic and Midwest is forecast to generate average annual earnings growth of almost 13% for the next five years, according to data from Refinitiv. The top line is expected to be a bit more modest, but there’s still upside, with analysts projecting 6.6% revenue growth this year, then 4.2% in 2020.

Analysts’ average price target of $41.20 gives CFG and implied upside of more than 20% over the next 12 months or so, according to Refinitiv. Citizens’ Q1 report is due out ahead of the April 18 open.

• Market value: $27.3 billion
• Dividend yield: 3.3%
• Analysts’ average recommendation: 2.33

SunTrust (STI, $61.56) still has its fans in the analyst community, but stock evaluators have gone into wait-and-see mode pending the finalization of a merger with BB&T (BBT). The $28 billion deal was announced in February and is expected to close before the end of this year.

UBS, for example, downgraded STI to “Neutral” (equivalent of “Hold”) in early March. “Our prior thesis no longer holds; investment case tied to whether BB&T merger creates value,” analysts wrote in a note to clients.

The majority of Wall Street’s pros are on the fence. Of the 27 analysts tracked by S&P Global Market Intelligence, 17 say SunTrust is a “Hold.” Eight call it a “Strong Buy,” while two have it at “Buy.”

• Market value: $36.8 billion
• Dividend yield: 3.4%
• Analysts’ average recommendation: 2.29

With nearly 1,900 branches and almost $220 billion in assets, BB&T (BBT, $48.11) was already one of the nation’s largest regional banks. Once it completes its merger with SunTrust, the combined firm will become the nation’s sixth biggest bank by assets.

However, analysts on average are merely upbeat, but not uber-enthused, about BB&T’s prospects.

Sandler O’Neill, for instance, applauds the SunTrust merger. But it also thinks investors should wait for a better entry point on BBT stock. The analysis outfit has a “Hold” rating on the shares, which is not an uncommon view. Fifteen of the 24 analysts tracked by S&P Global Market Intelligence fall in the middle. Only eight call BBT a “Strong Buy,” and one other analyst says “Buy.”

The large regional bank will report its latest financial results before the April 18 open.

• Market value: $280.2 billion
• Dividend yield: 2.1%
• Analysts’ average recommendation: 2.10

Shares in Bank of America (BAC, $29.07), the nation’s second largest bank by assets, are up a market-beating 18% so far in 2019.

With an average recommendation of 2.10, analysts are mostly bullish on the mega-cap financial stock, but there are a significant number of “Hold” calls. Of the 30 analysts surveyed by S&P Global Market Intelligence, 10 say BAC is a “Strong Buy” and seven have it at “Buy.” The remaining 13 analysts call it a “Hold.” That includes HSBC’s Alevizos Alevizakos, who started BofA at “Hold” on concerns such as margin contraction and declining loan growth.

Still, analysts forecast BAC to generate average annual earnings growth of 21% for the next five years. Their average target price of $33.17 gives the stock implied upside of 14% in the next 12 months or so.

Bank of America’s results should come before the April 16 opening bell.

• Market value: $153.4 billion
• Dividend yield: 2.8%
• Analysts’ average recommendation: 1.79

Analysts as a group aren’t as jubilant about large bank stocks as they are about the sector’s midsize and smaller companies. But Citigroup (C, $65.52), the nation’s fourth largest bank by assets, has a cleanly bullish camp. With an average recommendation of 1.79, analysts are split on whether the massive money center bank is a “Strong Buy” or a “Buy.”

As well they should be. With an average price target of $77.64, according to Refinitiv, shares in Citigroup have implied upside of more than 18% in the next 12 months or so.

UBS analysts, who rate Citigroup stock at “Buy,” say “a low bar could set (the) stage for near-term outperformance.” Shares in the bank are up 26% year-to-date already.

Wall Street expects average annual earnings growth of nearly 17% over the next five years. For the quarter to be reported ahead of the April 15 opening bell, expectations for profit growth are a bit more subdued at 7.1%, but still better than the sector average.

Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B, $202.78), sold a teensy bit of Apple (AAPL) stock in the fourth quarter of 2018, took new stakes in three companies, dumped one position just a few months after initiating it, and continued to go bonkers for bank stocks.

Indeed, the Oracle of Omaha made a total of 17 buys and sells during the three months ended Dec. 31. And because it can be instructive to see what Buffett has been up to, we took a closer look at Berkshire’s latest changes to its equity portfolio.

We know what the greatest value investor of all time has been doing because the U.S. Securities and Exchange Commission requires all investment managers with more than $100 million in assets to file a Form 13F quarterly to disclose any changes in share ownership. These filings add an important level of transparency to the stock market, and give Buffett-ologists a chance to get a bead on what he’s thinking.

When Buffett starts a new stake in some company, or adds to an existing one, investors take that as a vote of confidence. On the other hand, if he pares his holdings in a stock, it can spark investors to rethink their own investments.

Here’s the scorecard for what Berkshire Hathaway bought and sold during the last three months of 2018, based on the most recent 13F, filed on Feb. 14. (Keep in mind that not all “Warren Buffett stocks” are actually his picks – some smaller positions are believed to be handled by lieutenants Ted Weschler and Todd Combs.)

Data is as of Feb. 14, 2019. Sources: Berkshire Hathaway’s SEC Form 13F filed Feb. 14, 2019, for the reporting period ended Dec. 31, 2018; S&P Global Market Intelligence; Refinitiv; WhaleWisdom.

• Action: New stake
• Shares held: 14,166,748
• Value of stake: $261,235,000

Berkshire Hathaway announced in October that it would take a stake in StoneCo (STNE, $21.27) as the Brazilian financial technology company went public. The relatively small position in STNE, and the fact that it’s a fintech company, suggests the investment was made by one of Warren Buffett’s lieutenants, Ted Weschler or Todd Combs.

The company, which provides software and hardware for companies to facilitate credit- and debit-card payments, said its number of active clients more than doubled year-over-year in 2018. Total payment volume increased almost 74% in the fourth quarter of 2018 vs. the prior-year period.

Berkshire Hathaway is StoneCo’s fifth-largest investor, holding 5% of its shares outstanding, according to data from S&P Global Market Intelligence. The position in STNE jibes with Berkshire Hathaway’s investments in payments processors such as Visa (V), Mastercard (MA) and American Express (AXP).

• Action: New stake
• Shares held: 10,758,000
• Value of stake: $300,901,000

Warren Buffett made a move in the energy sector by initiating a position in Suncor Energy (SU, $32.55), Canada’s biggest oil and gas company – and if it sounds familiar, it should.

This is the second time Berkshire Hathaway has taken a stab at Suncor. The company originally invested in the energy giant in 2013, then sold the entirety of the position three years later.

Berkshire’s stake amounts to just 0.7% of Suncor’s shares outstanding, according to data from WhaleWisdom. Berkshire Hathaway’s only other investment in the energy sector is its position in oil and gas refiner and marketer Phillips 66 (PSX).

SU shares tumbled by nearly 30% in the fourth quarter of 2018, when Buffett was scooping them up. Apparently, the world’s greatest value investor liked the price.

• Action: New stake
• Shares held: 4,175,792
• Value of stake: $733,436,000

In another investment likely made by one of Buffett’s lieutenants, Berkshire Hathaway took a new stake in Red Hat (RHT, $180.02). Buffett himself tends to shy away from technology stocks such as Red Hat, which is an open-source software company, and the comparatively small stake of less than $1 billion is another clue.

What’s really intriguing about the position in Red Hat is that the company agreed to be acquired by International Business Machines (IBM) for $34 billion in October 2018. The deal is intended to boost Big Blue’s cloud-based services business.

“This acquisition brings together the best-in-class hybrid cloud providers and will enable companies to securely move all business applications to the cloud,” Red Hat said in a news release disclosing the acquisition. The deal is expected to close in the second half of 2019.

If Berkshire retains its position, it’s essentially holding IBM. Interestingly, Berkshire previously held an ill-considered stake in IBM from 2011 to 2017. It remains to be seen what happens the second time around.

• Action: Added to stake
• Shares held: 5,958,391 (+68% from Q3)
• Value of stake: $713,517,000

Berkshire Hathaway boosted its stake in Travelers (TRV, $126.93) by 68% in the fourth quarter. The holding company now owns nearly 6 million shares in the insurance firm, which is a member of the Dow Jones Industrial Average.

At less than $1 billion, the stake is relatively small beer for Berkshire Hathaway, whose core business is insurance. Buffett has a stake in Torchmark (TMK) and counts numerous insurers as wholly owned subsidiaries. Geico, General Re and United States Liability Insurance Group are just three companies BRK.B owns as part of its sprawling insurance empire.

Berkshire Hathaway, which first bought Travelers in the third quarter of 2018, now holds 2.2% of Travelers’ shares outstanding, according to WhaleWisdom data. The position, however, accounts for just 0.4% of Berkshire’s equity portfolio. For comparison’s sake, Apple (AAPL), which is Berkshire’s top holding, comprises nearly 22% of its stock portfolio.

• Action: Added to stake
• Shares held: 50,116,394 (+40% from Q3)
• Value of stake: $4,892,364,000

Warren Buffett continued to go gaga for big banks in the third quarter, upping his stake in JPMorgan Chase (JPM, $102.42), the nation’s biggest bank by assets, by 40%.

Buffett added to or started new positions in banks such as US Bancorp (USB), PNC Financial (PNC), Bank of America (BAC), Bank of New York Mellon (BK), Goldman Sachs (GS), Wells Fargo (WFC) and JPM in the third quarter of 2018. As we shall see, he’s still bullish on banks.

Berkshire, which first invested in JPM by purchasing 35.7 million shares in Q3, now owns more than 50 million shares in the Dow component. It holds 1.5% of the mega-bank’s shares outstanding.

Also note that Berkshire, JPMorgan Chase and Amazon.com (AMZN) have formed a venture aimed at providing health care more efficiently.

• Action: Added to stake
• Shares held: 72,269,696 (+37% from Q3)
• Value of stake: $2,417,421,000

Berkshire Hathaway enlarged its stake in General Motors (GM, $38.89) by 37% in the fourth quarter. It now owns 5.1% of the automaker’s shares outstanding, worth about $2.4 billion. The stake accounts for 1.3% of Berkshire’s equity holdings.

In January, GM surprised investors with a better-than-expected earnings forecast for 2019, helped by cost controls and a focus on higher-margin sales of large pickup trucks and sport utility vehicles in North America.

General Motors’ stock had its ups and down in the fourth quarter when Buffett was buying but ended the period down about 2.2%. What’s noteworthy is that GM shares are priced at just 6.1 times projected earnings and sport a dividend yield of 3.9%. That’s just the kind of value and income stream Buffett normally would seek out.

• Action: Added to stake
• Shares held: 8,263,062 (+35% from Q3)
• Value of stake: $966,034,000

In another bullish move for the bank sector, Berkshire Hathaway added to its stake in PNC Financial (PNC, $120.61). As with JPM, Buffett first started investing in PNC in the third quarter of 2018. PNC, the Pittsburgh-based regional financial services firm, ranks as the nation’s sixth-largest bank by assets, according to the Federal Reserve.

Berkshire Hathaway now owns 1.8% of PNC’s shares outstanding. The position comprises 0.5% of the holding company’s stock portfolio.

Shares in PNC fell about 14% over the course of the fourth quarter when Berkshire was adding to its stake.

• Action: Added to stake
• Shares held: 80,937,250 (+3% from Q3)
• Value of stake: $3,809,716,000

It might not be a household name, but Bank of New York Mellon (BK, $51.77) is a big deal in financial services, and Berkshire Hathaway can’t seem to get enough of it.

Bank of New York Mellon is a custodian bank that holds assets for institutional clients and provides back-end accounting services. Its roots actually go all the way back to 1784, when Bank of New York was founded by a group including Alexander Hamilton and Aaron Burr.

Warren Buffett added to Berkshire’s stake in BK by 3%, or more than 3 million shares, in the most recent quarter. With a total of 80.9 million shares, Berkshire Hathaway owns 8.2% of all shares outstanding … and has been rewarded with a market-beating 12% return so far in 2019.

• Action: Added to stake
• Shares held: 129,308,831 (+3% from Q3)
• Value of stake: $5,909,415,000

Warren Buffett bought another 4.4 million shares in U.S. Bancorp (USB, $50.46) – the nation’s fifth-largest bank by assets and its biggest regional bank – during the fourth quarter.

Berkshire Hathaway, which was U.S. Bancorp’s biggest shareholder at the end of the third quarter, now owns more than 8% of its shares outstanding. USB accounts for 3.2% of BRK.B’s equity portfolio.

Shares in USB tumbled by more than 13% over the course of the fourth quarter when Buffett added incrementally to Berkshire’s stake, but like BK, they’ve rebounded 12% in 2019’s early innings.

• Action: Added to stake
• Shares held: 896,167,600 (+2% from Q3)
• Value of stake: $22,081,569,000

Warren Buffett also made an incremental addition to Berkshire Hathaway’s stake in Bank of America (BAC, $28.39) in the fourth quarter. The holding company upped its holdings by 2%, or 18.9 million shares. Berkshire now owns 896.2 million shares, worth about $22.1 billion, in the nation’s second-largest bank by assets.

BAC accounts for a whopping 12.1% of Berkshire Hathaway’s equity portfolio, second in importance only to Apple.

Buffett’s interest in BAC dates back to 2011, when he swooped in to shore up the firm’s finances in the wake of the Great Recession. In exchange for investing $5 billion in the bank six years ago, Berkshire received preferred stock yielding 6% and warrants giving Berkshire the right to purchase BofA common stock at a steep discount. (The Oracle of Omaha exercised those warrants in 2017, netting a $12 billion profit in the process.)

• Action: Reduced stake
• Shares held: 249,589,329 (-1% from Q3)
• Value of stake: $39,370,221,000

In the slightest reversal of trend, Berkshire Hathaway was an Apple (AAPL, $170.80) seller in the most recent quarter. The company reduced its holdings by 1%, or 2.9 million shares, to 249.6 million shares, worth about $39.4 billion.

Warren Buffett nibbled at Apple in the prior quarter, picking up another 522,902 shares. Berkshire still owns more than 5% of the iPhone maker and it remains, at 21.5% or the portfolio, the company’s single biggest equity investment.

Apple is up just 8.1% year-to-date to lag the S&P 500 by more than 2 percentage points, but Buffett’s ardor can hardly be said to have cooled. As he has said to CNBC, he loves the power of Apple’s brand and its ecosystem of products (such as the iPhone and iPad) and services (such as Apple Pay and iTunes).

“I do not focus on the sales in the next quarter or the next year,” Buffett said. “I focus on the ... hundreds and hundreds and hundreds of millions of people who practically live their lives by (the iPhone).”

• Action: Reduced stake
• Shares held: 54,847,399 (-2% from Q3)
• Value of stake: $2,549,307,000

Berkshire trimmed its position in Southwest Airlines (LUV, $58.00) slightly in the most recent quarter, reducing its stake by 3%. The holding company now owns 54.8 million shares in the air carrier, worth about $2.5 billion.

That’s not to say Buffett has given up on LUV. Hardly. Berkshire Hathaway remains a top investor in Southwest with 9.8% of its shares outstanding. Furthermore, the airline is flying high so far in 2019. The stock is up more than 25% for the year-to-date vs. a gain of more than 10% for the S&P 500.

Analysts expect Southwest to generate average earnings growth of 17.5% a year for the next half-decade.

• Action: Reduced stake
• Shares held: 426,768,902 (-3% from Q3)
• Value of stake: $19,665,511,000

Warren Buffett trimmed Berkshire Hathaway’s stake in Wells Fargo (WFC, $48.52), but that doesn’t mean he has soured on the nation’s third-largest bank by assets.

Rather, as Buffett has explained in the past, Berkshire aims to keep its ownership of Wells Fargo’s shares outstanding to just under 10% to avoid triggering regulatory restrictions imposed by the Federal Reserve.

Wells Fargo suffered a series of setbacks over the past two years stemming from its phony accounts scandal and other black eyes. But Berkshire remains a top WFC investor, with 8.7% of the bank’s shares outstanding. Wells Fargo also happens to be BRK.B’s third-largest stock holding after Apple and Bank of America, comprising 10.7% of its portfolio.

• Action: Reduced stake
• Shares held: 7,033,499 (-4% from Q3)
• Value of stake: $2,004,336,000

Berkshire Hathaway continued to cut its position in Charter Communications (CHTR, $341.60), selling 307,486 shares, or 4% of its holdings. It still owns 7 million shares, worth about $2 billion, in the cable company.

Berkshire first bought shares in Charter in the second quarter of 2014 when it disclosed a position that was then worth $366 million. BRK.B still owns 3.1% of Charter’s shares outstanding. The position accounts for just 1.1% of Berkshire Hathaway’s equity portfolio.

CHTR shares are up just 6% over the past two years, vs. a gain of 17% for Standard & Poor’s 500-stock index.

• Action: Reduced stake
• Shares held: 21,938,642 (-15% from Q3)
• Value of stake: $1,836,922,000

Warren Buffett began investing in airline stocks in 2016 after decades of shunning the industry. As stunning as that reversal was, he’s still picky about the business, as his latest moves show.

As he did in the preceding quarter, Buffett continued to trim some of his bets on air carriers in the fourth quarter. Berkshire reported a 15% reduction in its stake in United Continental (UAL, $88.15). Indeed, the company jettisoned 4 million shares. BRK.B’s remaining stake of 21.9 million shares is worth about $1.8 billion.

The good news? Well, for one, analysts expect United to deliver average annual earnings growth of 15.6% for the next five years, according to data from Refinitiv. Also, Berkshire Hathaway still is a top UAL owner with 8.1% of its shares outstanding.

• Action: Reduced stake
• Shares held: 11,895,842 (-22% from Q3)
• Value of stake: $1,024,826,000

Berkshire Hathaway continued to pare its position in oil refiner Phillips 66 (PSX, $95.65). The holding company unloaded another 3.5 million shares in the fourth quarter, cutting its holdings by 22%.

Buffett first started selling PSX in the first quarter of 2018 to keep its ownership below 10% and avoid triggering a regulatory headache. The purchaser of the stock in Q1 – for $3.3 billion – was none other than Phillips 66.

It’s not clear what’s driving the latest selling, however. Berkshire Hathaway was the fourth-largest shareholder in PSX at the end of Q3. With just 2.6% of its shares outstanding, Berkshire owns far less than the 10% regulatory threshold.

• Action: Exited stake
• Shares held: 0 (-100% from Q3)
• Value of stake: $0

Well, that didn’t last long.

Warren Buffett has said his preferred holding period is “forever” – but he’s also quick to admit when he’s made a mistake. Apparently that was the case with Oracle (ORCL, $51.48), which Berkshire Hathaway sure dumped in a hurry.

The holding company exited its position in the enterprise software and cloud-computing company in the fourth quarter. What’s notable is that Berkshire first invested in the company – whose products and services include the Oracle Cloud, Java, Oracle AI and Internet-of-Things offerings – in the third quarter.

Berkshire sold all of its 41.1 million shares, which were worth $2.1 billion when it first disclosed the new holding back in November. Shares in Oracle fell about 13% over the last three months of 2018.

The Federal Reserve is widely expected to raise interest rates three times this year. In fact, the CME Group’s FedWatch tool even has been projecting a 25%-30% possibility of a fourth hike by the end of 2018. On the face of it, this could spell trouble for many dividend stocks that will have to compete with increasingly generous bond yields for attention. But bank stocks are one area of the market where rate increases would be welcomed with open arms.

Sure, in a small way, this is bad news for financial institutions that will have to pay customers more for their deposits. However, banks tend to pass only about a third of rate hikes onto customers in the form of higher interest on deposits. The real factor to consider is on the lending side of the equation. As interest rates improve, banks can charge more for loans. The difference between what banks pay out in interest and the interest they collect from loans is known as net interest margin (NIM).

Banks that can pass little of the rate hike on to their customers while earning much more from their lending operations should improve their NIM, and thus are strong targets in a rising-rate environment. Here are some bank stocks of varying sizes that should navigate this situation well.

Data is as of March 14, 2018. Companies are listed in alphabetical order. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Click on ticker-symbol links in each slide for current share prices and more.

• Market value: $328.6 billion
• Dividend yield: 1.4%

In an environment of rising rates, Bank of America (BAC, $32.14) will benefit from a low-cost deposit base and so-called “switching costs.” Switching costs are the costs consumers bear in the form of time, efforts and expenses, switching from one supplier to another. In banking, switching costs can be high and depositors are reluctant to do so if they have mortgages, loans and credit cards at a bank. Switching costs enable Bank of America to pay nothing on approximately a third of its deposits – and such a low-cost deposit base promises to be highly profitable as rates rise.

In its second-quarter earnings release last year, Bank of America said that a 100-basis-point increase in short- and long-term rates would boost net interest income by $3.2 billion over the next 12 months. Even for a bank that has earned between $2.5 billion and $5.5 billion quarterly over the past year, that is substantial.

Following a second round of stress tests in July 2017, Bank of America raised its quarterly dividend from 7.5 cents per share to 12 cents – a 60% hike. Analysts at BMO Capital Markets think tax reform, higher rates and share buybacks could add nearly 20% to earnings per share. If that’s the case, that could help fund another generous dividend hike.

• Market value: $42.5 billion
• Dividend yield: 1.9%
• BB&T Corp. (BBT, $54.67) is a large regional bank headquartered in Winston-Salem, North Carolina. Many of this bank’s deposits come from rural areas, where there is less competition and BB&T can offer lower rates. Analysts at Bank of America/Merrill Lynch expect the company’s efficiency ratio to improve, boosting margins.

Another reason for optimism is the company’s excellent management team. A testimony to the C-suite’s skills is that during the depths of the Great Recession, BB&T never reported a quarterly loss.

To be fair, the company does have a blemish on its dividend history, which dates back to 1995. That is, during the downturn, it reduced its payout from 47 cents quarterly to just 15 cents. However, it began re-establishing growth in 2016 and has now more than doubled the payout to its current 33 cents. Better still, it recently announced a 4.5-cent-per-share special dividend payable March 20.

BB&T appears to be re-committed to sharing its cash. That, combined with the benefit of higher interest rates, should serve BBT shareholders well.

• Market value: $2.4 billion
• Dividend yield: 0.4%
• Cadence Bancorp (CADE, $28.62), the smallest of the banks on this list at just $2.4 billion, is a regional bank with 66 branches in the Southwest, including in Alabama, Mississippi and Texas.

Cadence’s net-interest margin has improved significantly following previous rate hikes by the Federal Reserve. Reflective of its heavy commercial loan focus, 70% of the company’s loan portfolio is floating-rate, and interest rates on these loans will adjust higher following the three or more rate hikes expected of the Fed in 2018. Non-interest-bearing deposits increased to a quarter of all deposits in the fourth-quarter, tamping down the expense effect of higher rates. Cadence’s cost of deposits is well below 1%.

Accordingly, analysts at BMO Capital Markets expect the interest rate Cadence charges borrowers to outpace the rates it pays depositors.

• Market value: $16.9 billion
• Dividend yield: 1.2%

Headquartered in Dallas, Texas, with $72 billion in assets, Comerica (CMA, $97.72) makes loans to businesses, individuals and business owners in Arizona, California, Florida, Michigan and Texas. It’s not the biggest name in banking, but shareholders appreciate the 22.7% average annual return the company has delivered over the past half-decade.

Comerica’s NIM has improved dramatically of late because many of the bank’s borrowers hold floating-rate loans. Looking ahead, these loans will adjust higher as the Federal Reserve hikes rates this year; as a result, CMA is expected to report better profits than its competitors.

Comerica should be able to raise the interest rate it charges borrowers while only slightly ticking up the rate it pays out on deposits. Bank of America/Merrill Lynch analysts believe the interest-rate outlook for regional banks like Comerica is positive. BMO analysts, meanwhile, write that Comerica’s net interest margin should materially improve during the first quarter of 2018, with more to likely come should March's anticipated rate hike become reality.

• Market value: $74.6 billion
• Dividend yield: 1.8%

Pittsburgh-based PNC Financial (PNC, $158.09) is another large regional bank that serves 19 states and the District of Columbia. Following its fourth-quarter earnings announcement in mid-January, management said it favors dividend hikes over buybacks. We didn’t need much proof, considering that in July 2017 – following industry-wide stress tests – management raised the quarterly dividend 36% to 75 cents per share.

In 2016, PNC’s efficiency ratio (expenses as a percentage of revenue) came in at 52.5% – almost 10 percentage points better than the average of 62% among its large-bank peers. A low efficiency ratio translates to higher cash flows, which can be returned to shareholders through share buybacks or dividends – PNC’s own stated preference. Analysts at Bank of America/Merrill Lynch expect PNC, like many other banks, to be a beneficiary of higher interest rates this year.