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As Brazil's economy grows, so does its banking sector. Banco Bradesco (BBD - Snapshot Report) recently reported fourth quarter results which surprised on the Zacks Consensus Estimate. This Zacks #2 Rank (buy) expects to see double digit credit expansion in 2011.

Banco Bradesco is one of Brazil's largest banks. It offers banking and financial services to both individuals and all different sized companies, from the little guys to the global conglomerates.

The bank has 6,551 branches, PAB mini-branches and PAAs throughout the country and customers can also use several other banking networks as well as the 6,203 Banco Postal branches.

Banco Bradesco Surprised By 2.4% in the Fourth Quarter

On Jan 31, Banco Bradesco reported its fourth quarter and full year results and surprised on the Zacks Consensus for the 3rd straight quarter.

Total assets rose 25.9% to R$637.5 million as business volume expanded. The loan portfolio grew 21% and was boosted by corporate loans.

Outlook for 2011 Is Strong

The company's success revolves around continued growth of Brazil's economy. Banco Bradesco believes credit, employment and income will all continue to grow robustly in 2011.

The company does not see any signs of a credit bubble on the part of borrowers, despite the Central Bank raising interest rates to contain any excessive expansion.

It still expects bank loan growth of between 15% and 19% in 2011. Corporate loan growth is projected at 16% to 20% while individual loans are expected to grow between 13% and 17%.

Zacks Consensus Estimates Rise for 2011

The analysts liked what they heard in the fourth quarter report as the 2011 Zacks Consensus Estimate has risen 2 cents to $1.73 in the last month.

Earnings are expected to grow 11.6% in 2011 and another 10.9% in 2012.

Still Value With This Bank

The best valuation metric with banks is the price-to-book ratio. A price-to-book ratio under 2.0 signifies value for a bank. Banco Bradesco's P/B ratio is just 1.3.

But it also has an attractive forward price-to-earnings ratio of 10.9.

Additionally, the company sports a stellar 1-year return on equity of 22.6%.

Shares Have Pulled Back

Since I last reviewed the bank in October 2010, shares have pulled back off 52-week highs. Banking stocks have weakened since the Central Bank began raising interest rates to combat inflationary pressures.

That makes for an attractive entry point at this level. Shareholders are also rewarded with a small dividend, currently yielding 0.6%.

Read the Oct 29, 2010 article.

This Week's Value Zacks Rank Buy Stocks

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Wasn't the semiconductor cycle supposed to be coming to an end by now? Vishay Intertechnology Inc. (VSH) isn't showing any signs of slowing as it recently surprised for the fifth quarter in a row. Read the full article.

Food and food ingredients are suddenly in the spotlight. Corn Products International (CPO) has seen sales dramatically rebound from the depths of the recession. Earnings are expected to grow by 25% in 2011. Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

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