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Deregulation could also help the financial sector improve their margins. President Donald Trump’s administration has shown its eagerness in cutting back the red tape and remove some of the post-financial crisis regulations that has stifled the industry.
The recently completed Federal Reserve stress tests were passed with flying colors by KBWB constituents. Improving earnings and sturdier balance sheets coupled with the stress test results are expected to give big banks the ability to further boost shareholder rewards, including buybacks and dividends.
KBWB has a trailing 12-month yield of just 1.4%, indicating plenty of room for the ETF’s components to safely raise dividends.
For more information on the banking sector, visit our financial category.