WELLS FARGO & CO. $34 - New York symbol WFC

WELLS FARGO & CO. $34 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 5.3 billion; Market cap: $180.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.6%; TSINetwork Rating: Average; www.wellsfargo.com) earned $4.9 billion, or $0.88 a share, in the three months ended September 30, 2012. That’s up 21.7% from $4.1 billion, or $0.72 a share, a year earlier.

The bank continues to do a good job of adjusting the terms of troubled loans it acquired when it bought rival banking firm Wachovia in 2008. In the latest quarter, it set aside $1.6 billion to cover bad loans, down 12.1% from $1.8 billion a year ago.

Revenue rose 8.0%, to $21.2 billion from $19.6 billion. Low interest rates continue to encourage businesses and consumers to take out loans. The wealth management division is also attracting more clients.

The stock is up 22% since the start of the year, and trades at 10.2 times its projected 2012 earnings of $3.34 a share. The $0.88 dividend yields 2.6%. However, allegations that the bank defrauded a U.S. government mortgage insurance program could hold back the stock in the near term.

Wells Fargo is a hold.

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