Should You Buy Truist? 5 Reasons This Bank Stock Stands Out

 

Imagine a stock that pays you 6% yearly just to hold it, while sitting on a potential 50% upside. Let’s break down Truist Financial (TFC), a banking giant worth considering.

Truist is a big bank with $531.2 billion in assets. It serves about 15 million customers through 1,928 branches in 15 states and Washington, D.C. The company was created in 2019 when two banks, BB&T and SunTrust, joined together. Truist is especially strong in the Southeastern U.S., including fast-growing states like Texas, Florida, and the Carolinas. Besides regular banking, Truist also makes money from insurance, helping people manage their money (wealth management), and investment banking. It has $390.5 billion in customer deposits and $301.5 billion in loans. More than 80% of its customers use Truist as their main bank, which shows strong customer loyalty.

 

Why Truist Could Do Really Well

1. Growth in the Sunbelt

• Truist has many branches in some of the fastest-growing cities in the U.S., like Austin, Nashville, and Charlotte.
• These areas are growing much faster than the rest of the country, with populations rising by 1.5% each year (compared to 0.4% nationally).
• For example, Texas added 1.3 million new residents in 2024, which helped Truist’s business loans in the state grow by 7% in just one year.

2. Makes Money in Different Ways

• Only half of Truist’s money comes from regular loans.
• The rest comes from:
  • Wealth management: $12 billion in assets they help manage for clients.
  • Insurance: $2.4 billion in insurance premiums each year.
  • Investment banking: Fees from this business grew 18% in late 2024.

This mix helps Truist stay steady even if interest rates change.

3. The Stock Is Cheap

• Truist’s stock price is low compared to what the company is worth on paper (it trades at 0.76 times its book value).
• It also trades at 8 times its earnings, which is much cheaper than big banks like JPMorgan Chase.
• Experts think the real value of Truist’s assets is about $26.89 per share, but the stock is only $35.30, so there’s room for the price to go up.

4. Safe and High Dividend

• Truist pays a dividend of $0.52 every three months ($2.08 per year), which hasn’t changed since 2023—even during tough times for banks.
• The dividend yield is 5.88%, which is about three times higher than the average big company.
• The bank has plenty of cash ($48.4 billion) and passed government stress tests, so the dividend looks safe.

5. Saving Money After the Merger

• Truist expects to save $1.6 billion every year by 2025 because of the merger, and it’s already saved $750 million by closing extra branches.
• The company plans to grow its profits faster than its expenses in 2025, which would be the first time since 2022.

 

Risks to Watch

1. Commercial Real Estate Loans

• Truist has $27.1 billion in loans for things like office buildings, which is 9% of all its loans.
• If office buildings stay empty, some businesses might not pay back their loans.
• Most of these loans are in fast-growing areas with low vacancy rates, which helps reduce the risk.

2. New Rules from Regulators

• New banking rules could force Truist to count $20 billion in potential losses from investments, which might limit how much money it can return to shareholders.
• Truist already raised $1.95 billion by selling part of its insurance business to help meet these rules.

3. Challenges from the Merger

• Combining two big banks cost $2.2 billion in restructuring.
• While Truist is saving money, there are still challenges, especially in keeping wealth management clients (retention dropped from 93% to 89% after the merger).

 

The Bottom Line

Truist is a strong, reliable bank focused on fast-growing parts of the country. The stock is cheap, pays a high dividend, and has a good chance to grow as the Sunbelt region expands. Key upcoming events include the April 17, 2025 earnings report, the June 9, 2025 redemption of $1 billion in senior notes, and a possible dividend increase in 2026. With a 6% yield and the potential for double-digit returns, Truist offers both safety and growth for investors, even in uncertain times.