With the earnings season nearing its end, the Finance sector seems to have been one of the best performers. So, we thought of highlighting a stock from the sector that reflects strong fundamentals and solid long-term growth opportunity.
Enterprise Financial Services Corp (NASDAQ:EFSC) is one such stock that has been witnessing upward estimate revisions, reflecting analysts’ optimism. In the last 30 days, the Zacks Consensus Estimate for 2017 and 2018 increased 1.9% and 4.6%, respectively.
Further, shares of this Zacks Rank #2 (Buy) stock gained 14.6% in the last six months, outperforming 11.7% growth of the Zacks categorized Midwest Banks industry.
Enterprise Financial has a number of other aspects that make it an attractive investment option.
Earnings Per Share Growth: Enterprise Financial witnessed EPS growth of nearly 11% in the last three-five years. This earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth (F1/F0) of 8.7%.
Also, the company’s long-term (three-five years) estimated EPS growth rate of 9% promises reward for investors in the long run.
Revenue Strength: Enterprise Financial’s revenues increased at a CAGR of 3% over the last four years (2013–2016). Further, the top line is expected to grow 25.3% in 2017, higher than the industry average of 2.6%.
Superior Return on Equity (ROE): Enterprise Financial has an ROE of 10.52%, better than the industry average of 9.65%. This shows that the company reinvests its cash more efficiently.
Stock Seems Undervalued: Enterprise Financial has a trailing 12 month P/E ratio of 17.40 compared with the Zacks categorized Midwest Banks industry’s P/E ratio of 17.78. Based on this ratio, the stock seems undervalued.
Moreover, the company has a forward PE ratio (price relative to this year’s earnings) of just 16.34. Naturally, a slightly more value-oriented path may be ahead for Enterprise Financial stock in the near term too.
Other Stocks to Consider
Some other top-ranked stocks in the finance space are Raymond James Financial, Inc. (NYSE:RJF) , Comerica Incorporated (NYSE:CMA) and Lazard Ltd (NYSE:LAZ) .
Raymond James Financial witnessed an upward earnings estimate revision of 6% for the current fiscal year, in the last 60 days. Its share price increased 11.5% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate was revised 10.2% upward. The company’s share price increased 23.3% in the last six months.
Lazard has a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 5.7% for the current year, in the last 60 days. Its share price increased 16.5% in the last six months.
The Best & Worst of Zacks
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Comerica Incorporated (CMA): Free Stock Analysis Report
Enterprise Financial Services Corporation (EFSC): Free Stock Analysis Report
Raymond James Financial, Inc. (RJF): Free Stock Analysis Report
Lazard Ltd. (LAZ): Free Stock Analysis Report
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Zacks Investment Research