- High inflation followed by high interest rates will benefit banks’ interest income, positioning them for outperformance against other sectors in the present macroeconomic context.
- Among banks, HTBK will do especially well as it ranks very high in terms of its share of interest income-to-total revenue and has a large proportion of variable rate loans.
- Apart from earnings upside, HTBK is expected to provide a dividend yield of easily more than 4.4%.
- On top of the income from dividends, the dividend valuation model suggests capital gains upside of 24.7%.
For further details see:
Heritage Commerce: Dividend Yield And Capital Upside Supported By Rising Interest Rates