1 Bank Stock That Can Thrive in Times of Boom or Bust
Bank stocks tend to be heavily impacted by the state of the economy, trading higher when there is economic prosperity and lower during times of recession. That's because banks lend to and do business with just about every sector in the economy. This may explain why the sector got hit particularly hard last year during the hardest months of the pandemic, but has seen an outsized recovery this year compared to the broader market. Due to this factor, it is important to look for bank stocks that produce strong earnings in a booming economy, but are also protected during a downturn.
Luckily, the Federal Reserve recently released its annual stress testing results, where it puts banks through a hypothetical severely adverse economic situation and models out how the largest U.S. banks would perform. After seeing these results, here's one bank stock that I feel confident is able to perform strongly in times of boom or bust.
It's no secret that U.S. Bancorp (NYSE: USB) is one of the stronger super regional bank stocks, if not the strongest. That's likely one of the main reasons that legendary investor Warren Buffett's company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has essentially maintained its position in the bank while selling most of its other bank holdings over the past year.
Source Fool.com
