Intesa Sanpaolo: High-Yield Dividends Fueled By Consistent Earnings Growth

2025-05-10 01:15:39 ET

Summary

• Intesa Sanpaolo, Italy's largest banking group and third by market cap in Europe, has rebounded strongly, rising 150% from my average cost.
• The bank's resurgence is driven by the post-pandemic economic recovery and rising interest rates aimed at combating inflation.
• Intesa Sanpaolo now represents a 12% position in my portfolio, reflecting its significant growth and stability.
• I will review its latest performance and explain my current strategy regarding this investment.

Introduction

Just a few years ago, banks were shunned as dangerous investments that resembled, to a certain extent, dead money. After all, the Great Financial Crisis and a zero-interest environment created two headwinds that undermined both their credibility and their earnings. This was particularly true in Europe, where a sovereign debt crisis was also felt. Then, as the economy rebounded after the pandemic, we flipped the page, and we saw for the first time in over a decade, interest rates rising aggressively to tame inflation. ...

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