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Halftime—Analyst: These 7 Banks Could Soon Raise Their Dividend

Tuesday, 8 Feb 2011 | 1:33 PM ET

Are U.S. banks getting ready to up their dividends?

Last year, the U.S. government said it would allow well-capitalized banks to raised dividends. To date, the market has yet to see much action. But according to one banking analyst, the dividend hikes could come sooner than later.

In a note, RBC Capital Markets analyst Gerard Cassidy said the following banks could raise dividends: Bank of New York Mellon, Capital One Financial, JPMorgan Chase, PNC Financial Services Group, State Street, U.S. Bancorp , and Wells Fargo.

Stocks to Watch
The "Fast Money" traders discuss McDonald's stock moves, possible dividend increases at US banks, Disney's upcoming earnings and more.

Of all the financial institutions listed, Joe Terranova said Capital One stands out to him. Few on Wall Street thought this bank would recover in the way it has, said the chief market strategist at Virtus Investment Partners. Even though it's at a 52-week high, he thinks it could go higher still.

Steve Cortes, founder of Veracruz, is a fan of dividend-paying stocks. In terms of price action, he said the financials are trading "terrifically." Cortes now regrets having taken profits in Morgan Stanley last week. He expects the market to shift out of oil names and into the Financial Select Sector SPDR , an exchange-traded fund that tracks a basket of financial institutions.

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POPS & DROPS

Stocks rose Tuesday, led by financials, after investors shrugged off China's interest rate hike for the second time in just over a month and a handful of disappointing earnings reports. In the wake of it all, the "Fast Money" traders found these market movers to be the most interesting by midday trading.

Pops (stocks that went higher)

Wynn Resorts (WYNN) popped 2%: The casino and hotel operator saw its estimates raised at Wells Fargo, which cited strength in the Macau market. Wynn also moved its earnings release to Thursday. Terranova likes Wynn options. He recommends buying protection through puts, though, as the stocks is flirting with a 52-week high.

Toyota Motor (TM) popped 3.5%: The automaker raised its profit and revenue forecasts for full year even as a strong yen took a toll on quarterly earnings. Cortes recommends buying TM and selling Ford Motor .

SanDisk (SNDK) popped 4%: The data solutions company saw shares rally after Sterne Agee upgraded the stock to ‘buy’ from ‘neutral.' Brian Kelly, founder of Kanundrum Capital, said its Flash products are hot right now. He likes this name and the space in general.

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CALL THE CLOSE

Before the "Fast Money" traders took off, they shared their thoughts on where the market could go and how they plan to play it.

Investors should take profits on energy and traders should get short, Cortes said.

Patty Edwards, chief investment officer at Trutina Financial, still likes Alaska Air Group .

Kelly is a buyer of the market.

Terranova would buy Pepsico on this pullback.

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Trader disclosure: On Feb. 8, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova owns (VRTS), (C), (UPL), (GM), (PEP), (LTD), (CVI), (SU) and (CNQ). Terranova owns (POT) puts. Steve Cortes owns (SVU). Steve Cortes owns (K). Steve Cortes owns (SWY). Steve Cortes owns (PM). Steve Cortes owns (MO). Steve Cortes is short (LVS). Steve Cortes is short the British Pound. Steve Cortes is short the Australian Dollar. Steve Cortes is short Crude. Steve Cortes is short (XLE) vs. S&P long. Jon Najarian owns (BAX) calls

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JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (DPUKF)

PATTY EDWARDS
Edwards owns (ALK) for clients
Edwards owns (SPY) for clients
Edwards owns (XLB) for clients
Edwards owns (GLD) for clients
Edwards owns (SLV) for clients
Edwards owns (BP) for clients
Edwards owns (BA) for clients
Edwards owns (AMZN) for clients
Edwards owns (V) for clients
Edwards owns (JNJ) for clients
Edwards owns (AAPL) for clients
Edwards owns (GOOG) for clients
Edwards owns (VZ) for clients
Edwards owns (MSFT) for clients
Edwards owns (C) for clients
Edwards owns (GE) for clients
Edwards owns (TGT) for clients
Edwards owns (MCD) for clients
Edwards owns (DIS) for clients
Edwards owns (TEVA) for clients

BRIAN KELLY
Accounts Managed by Kanundrum Capital Own (ATW)
Accounts Managed by Kanundrum Capital Own (BAC)
Accounts Managed by Kanundrum Capital Own (DAL)
Accounts Managed by Kanundrum Capital Own (EBAY)
Accounts Managed by Kanundrum Capital Own (GLD)
Accounts Managed by Kanundrum Capital Own (IAU)
Accounts Managed by Kanundrum Capital Own (MCP)
Accounts Managed by Kanundrum Capital Own (MS)
Accounts Managed by Kanundrum Capital Own (RDC)
Accounts Managed by Kanundrum Capital Own (SLV)
Accounts Managed by Kanundrum Capital Own (DRYS)
Accounts Managed by Kanundrum Capital Own (JEF)
Accounts Managed by Kanundrum Capital Own The U.S. Dollar
Accounts Managed by Kanundrum Capital Are Short the Australian Dollar
Accounts Managed by Kanundrum Capital Are Short The Yen

ADDISON ARMSTRONG
Armstrong has no disclosures

CNBC.com with wires.

  Price   Change %Change
ALK
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BK
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COF
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F
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JPM MLP ETN
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MS
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PEP
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PNC
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STT
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USB
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WFC
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SPDR FIN SEL
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