Though the current economic scenario has made people wary of investing in stock markets, a few reasons suggest that it is a wise idea to buy Metropolitan Bank Holding Corp. (NYSE:MCB) stock now.
Over the past 60 days, the Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.5% upward, which suggests that analysts are optimistic regarding its earnings growth potential. As a result, the company currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of Metropolitan Bank have lost 52.9% so far this year, owing to the current economic slowdown on fears regarding the coronavirus outbreak. The industry to which the stock belongs has lost 42.6% over the same period.
However, driven by the company’s strong fundamentals and solid earnings growth prospects, its price performance is expected to improve in the future.
Key Driving Factors
Earnings per Share (EPS) Growth: Metropolitan Bank’s earnings have increased at a CAGR of 23.3% over the last three years. Moreover, its earnings are projected to grow 23.6% in 2020 and 14.8% in 2021.
Moreover, it has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 6.4%.
Revenue Strength: Metropolitan Bank continues to make steady progress toward improving its top line, which has witnessed a CAGR of 35.7% over the past five years (2015-2019). The company’s projected sales growth rates of 19.2% for 2020 and 12.8% for 2021 ensure the continuation of the upward trend in revenues.
Reasonable Valuation: The stock looks undervalued right now when compared with its broader industry. It currently has a price/earnings (P/E) (F1) ratio of 4.03, lower than the industry average of 7.28. Its price/book (P/B) ratio of 0.49 is also below the industry average of 0.75.
Superior Return on Equity (ROE): Metropolitan Bank has an ROE of 10.52%, higher than the industry average of 10.01%. This suggests that the company reinvests its cash more efficiently than its peers.
Other Stocks That Warrant a Look
A few other top-ranked stocks from the finance space are mentioned below.
Cohen & Steers Inc.’s (NYSE:CNS) Zacks Consensus Estimate for current-year earnings has been revised upward by 4.9% over the past 60 days. The company currently sports a Zacks Rank #1.
Artisan Partners Asset Management Inc. (NYSE:APAM) has witnessed an upward earnings estimate revision of 4.1% for the current year over the past 60 days. At present, the company flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for earnings of Focus Financial Partners Inc. (NASDAQ:FOCS) has been revised 4% upward for the current year over the past 60 days. The stock currently carries a Zacks Rank #2 (Buy).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Cohen & Steers Inc (CNS): Free Stock Analysis Report
Artisan Partners Asset Management Inc. (APAM): Free Stock Analysis Report
Metropolitan Bank Holding Corp. (MCB): Free Stock Analysis Report
Focus Financial Partners Inc. (FOCS): Free Stock Analysis Report
Original post