Commerce Bancshares, Inc. (NASDAQ:CBSH) offers a profitable investment opportunity driven by steady earnings growth and a strong liquidity position. In second-quarter 2017, the bank recorded nearly 14% year over year increase in earnings.
Analysts also seem to be optimistic about its growth prospects as evident from the upward estimate revisions. Over the last 30 days, the Zacks Consensus Estimate for the current year was revised 3.5% upward.
Further, this Zacks Rank #2 (Buy) stock has rallied 3.3% in the last three months against the industry’s decline of 1.1%.
Fundamentals Show a Lot of Promise
Revenue Growth: Commerce Bancshares’s net revenue reflected compounded annual growth rate of 4.5%, over the last three years (2014–2016). The same trend persisted in the first six months of 2017. The sturdy top-line increase has been backed by strong loan and deposit growth.
The company’s projected sales growth (F1/F0) of 7.6% for 2017 (as against the industry average of about 2.6%) indicates its superiority in generating revenues.
Earnings Per Share (EPS) Strength: Commerce Bancshares has witnessed 10.7% growth in earnings per share over the last three to five years. The trend is expected to continue in the near term as well. The company’s projected EPS growth is 12.6% and 5.3% for 2017 and 2018, respectively.
Further, its long-term (three to five years) expected EPS growth of 6.2% promises rewards for shareholders.
Strong Leverage: Commerce Bancshares’s debt/equity ratio is at 0.04 compared with the industry average of 0.45, indicating lower debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): Commerce Bancshares’s ROE is 11.24% compared with the industry average of 9.22%, reflecting the company’s commendable position over its peers.
Other Stocks to Consider
Some other stocks in the same space worth considering include Peoples Bancorp Inc. (NASDAQ:PEBO) , Wintrust Financial Corporation (NASDAQ:WTFC) and First Merchants Corporation (NASDAQ:FRME) .
Peoples Bancorp has an expected year-over-year earnings growth of 19.3% for 2017. Its share price has risen more than 41.3% over the last one year. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Wintrust Financial also sports a Zacks Rank #1. For the current year, it has an expected year-over-year earnings growth of 17.4%. Its share price has increased 38.8% in the last one year.
First Merchants Corporation carries a Zacks Rank #2. It has an expected year-over-year earnings growth of 15.2% for 2017. Over the last one year, its share price has jumped 47.7%.
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Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report
Wintrust Financial Corporation (WTFC): Free Stock Analysis Report
First Merchants Corporation (FRME): Free Stock Analysis Report
Peoples Bancorp Inc. (PEBO): Free Stock Analysis Report
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Zacks Investment Research