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9.1 Outstanding Reasons Which May Make Banco Santander plc A Buy

Today I am outlining why I believe Banco Santander (LSE: BNC) (NYSE: SAN.US) is a stunning stock selection for income investors.

Bank on the business for delicious dividends

Shares in Banco Santander have rocketed higher in recent weeks, defying the macroeconomic jitters affecting the rest of the banking sector and leaping almost 24% since the start of September. Despite this recent strength, I believe that Santander still offers fantastic value for savvy dividend seekers, and the banking behemoth currently carries a forward dividend yield of 9.1% based on the City’s current dividend projections.

Santander has kept the full-year dividend frozen during each of the past four years, at 60 euro cents, even though losses per share have continued to rack up during that period. And City number crunchers anticipate a similar full-year dividend in 2013, a payout whose yield comfortably outstrips an average forward reading of 3.7% for the entire banking sector and 3.3% for the FTSE 100.

Even though the dividend is expected to remain static for the current 12-month period, in my opinion the potential for earnings to ignite over the long term should result in increasingly juicy dividends moving ahead. Indeed, economic forecasters are expecting earnings per share to jump 89% and 22% in 2013 and 2014 respectively, to 43.5 euro cents and 52.9 euro cents.

Santander looks to have finally put the worst of the fallout of the 2008/2009 banking crisis behind it, and with strong exposure to the rich emerging markets of Latin America — this region makes up 50% of group profits — I believe that the banking giant is in great shape to realise stonking earnings expansion in future years. Recent problems in Brazil prompted Latin American net attributable profit to dip 11% in January-June, but I consider this to a mere blip in an otherwise compelling growth story.

Although the share price has shot higher since autumn kicked in, Santander is still trading at bargain basement levels — a price to earnings to growth (PEG) reading of 0.2 for this year and 0.6 for 2014 is well below the value benchmark of 1. So in my opinion not only does Santander offer lucrative dividend prospects at current prices, but a stunning earnings outlook should provide a further catalyst for explosive share price growth.

Look to Woodford for other spectacular stocks

So although I believe the banking giant is an excellent all-round stock pick, there are a whole host of other FTSE 100 winners just waiting to bolster your investment returns. And I strongly recommend that you check out these recommendations from veteran fund manager Neil Woodford which are primed with explosive growth potential.

Woodford -- in charge of UK Equities at Invesco Perpetual -- has more than 30 years' experience in the industry, and boasts an exceptional track record when it comes to selecting stock market stars.

This exclusive report, compiled by The Motley Fool's crack team of analysts, is totally free and comes with no further obligation. Click here now to download your copy.

> Royston does not own shares in Banco Santander.