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3 Reasons to Sell USB and 1 Stock to Buy Instead

By: StockStory

September 25, 2025 at 00:00 AM EDT

USB Cover Image

U.S. Bancorp trades at $49.14 and has moved in lockstep with the market. Its shares have returned 12.4% over the last six months while the S&P 500 has gained 14.9%.

Is now the time to buy U.S. Bancorp, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is U.S. Bancorp Not Exciting?

We're swiping left on U.S. Bancorp for now. Here are three reasons why USB doesn't excite us and a stock we'd rather own.

1. Net Interest Income Points to Soft Demand

Net interest income commands greater market attention due to its reliability and consistency, whereas one-time fees are often seen as lower-quality revenue that lacks the same dependable characteristics.

U.S. Bancorp’s net interest income has grown at a 4.9% annualized rate over the last five years, worse than the broader banking industry. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.

U.S. Bancorp Trailing 12-Month Net Interest Income

2. Low Net Interest Margin Reveals Weak Loan Book Profitability

Net interest margin (NIM) represents how much a bank earns in relation to its outstanding loans. It's one of the most important metrics to track because it shows how a bank's loans are performing and whether it has the ability to command higher premiums for its services.

Over the past two years, we can see that U.S. Bancorp’s net interest margin averaged a weak 2.7%, reflecting its high servicing and capital costs.

U.S. Bancorp Trailing 12-Month Net Interest Margin

3. Steady Increase in TBVPS Highlights Solid Asset Growth

For banks, tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.

Although U.S. Bancorp’s TBVPS increased by a meager 2% annually over the last five years, the good news is that its growth has recently accelerated as TBVPS grew at a solid 13.6% annual clip over the past two years (from $20.04 to $25.86 per share).

U.S. Bancorp Quarterly Tangible Book Value per Share

Final Judgment

U.S. Bancorp isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 1.4× forward P/B (or $49.14 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're pretty confident there are superior stocks to buy right now. We’d recommend looking at the most entrenched endpoint security platform on the market.

Stocks We Like More Than U.S. Bancorp

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

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