Improving operating backdrop and rising rate environment, along with the strengthening of domestic economy, should keep supporting performance of the banking stocks. Also, renewed optimism related to lesser regulations with the passage of the Financial Choice Act position bank stocks well.
Keeping these factors in mind, today we have picked ServisFirst Bancshares, Inc. (NASDAQ:SFBS) for you to consider. Headquartered in Birmingham, AL, the company is a profitable investment opportunity, driven by steady earnings growth. In fact, the company is witnessing upward estimate revisions, which raises analysts’ optimism about its prospects.
Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 rose 6% and 4.7%, respectively. Shares of this Zacks Rank #1 (Strong Buy) stock have rallied 5.7% over the last six months, as against the Zacks categorized Financial Savings & Loan industry’s decline of 2.9%.
There are a few other factors that make ServisFirst Bancshares a solid investment option.
Earnings Growth: ServisFirst Bancshares witnessed earnings growth of 29.5% in the last three to five years. This earnings momentum is likely to continue in the near term as reflected by the company’s projected earnings per share (EPS) growth rate (F1/F0) of 17.11% compared with industry average of 6.5%.
Revenue Strength: ServisFirst Bancshares’ revenues witnessed a CAGR of 18% over the last five years (2012–2016). Driven by improving rate environment and rising loan demand, the company’s top line is expected to grow 19.8% in 2017 and 15.2% for 2018.
Strong Leverage: ServisFirst Bancshares’ debt/equity ratio is 0.10 compared with the industry average of 0.67. The relatively strong financial health of the company will help it perform better than its peers under a dynamic business environment.
Superior Return on Equity (ROE): ServisFirst Bancshares has an ROE of 15.29% better than the industry average of 6.56%. This shows that the company reinvests its cash more efficiently.
Other Stocks Worth a Look
Some other stocks worth considering in the same industry include Citizens Financial Group, Inc. (NYSE:CFG) , Flagstar Bancorp, Inc. (NYSE:FBC) and BankFinancial Corporation (NASDAQ:BFIN) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Citizens Financial has witnessed an upward earnings estimate revision of 6.1% for the current year, over the past 60 days. Also, over the last six months, its share price rose 4.6%.
Flagstar Bancorp earnings estimates were revised 2.2% upward for the current year, in the past 60 days. Also, its share price increased 7.4% over the last six months.
BankFinancial recorded an upward earnings estimate revision of around 18% for the current year, in the past 60 days. Also, its share price has seen a jump of 5% over the last six months.
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Flagstar Bancorp, Inc. (FBC): Free Stock Analysis Report
ServisFirst Bancshares, Inc. (SFBS): Free Stock Analysis Report
Citizens Financial Group, Inc. (CFG): Free Stock Analysis Report
BankFinancial Corporation (BFIN): Free Stock Analysis Report
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