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4 Reasons Why BOK Financial (BOKF) Stock is Worth Buying
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In light of the regional banking crisis following the Silicon Valley Bank collapse, investors seem worried about the industry’s ability to navigate the pressure of higher interest rates, which are generally boons for banks. Despite this, there are a number of bank stocks worth considering, based on strong fundamentals and prospects. One such stock is BOK Financial Corporation (BOKF - Free Report) .
The company has been working to diversify its loan portfolio to healthcare and service lending. Robust pipeline will further drive loan growth. Increase in loan demand is expected to result in solid top-line improvement. Also, a strong credit position may enable BOKF to navigate any economic uncertainty and deploy capital to enhance shareholders’ value.
BOKF currently carries a Zacks Rank #2 (Buy). The company’s shares have fallen 6.8% over the past six months compared with the industry's 21.5% decline.
Image Source: Zacks Investment Research
What Makes BOKF an Attractive Pick?
Earnings Growth: In the past three to five years, BOKF recorded earnings growth of 6%. The momentum is expected to continue in the near term. The company’s earnings are expected to rise 21.4% for 2023, rewarding long-term investors.
BOKF also has a decent earnings surprise history. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 6.58%.
Balance Sheet Strength: BOK Financial is able to post continuous loan growth on a diverse business model and increased loans to individuals. Loans witnessed a compound annual growth rate (CAGR) of 1% in the last five years (2018-2022). Deposits have showcased a growing trend, seeing a five-year CAGR of 8.1% through 2018-2022. We believe that the company will be well-poised for organic growth on the back of strong loan pipeline and business-in-migration from other markets.
Higher Net Interest Income (NII): BOK Financial’s NII and the yield on interest-earning assets are expected to witness robust growth on high rates and solid loan demand. The company projects $1.4 billion NII for 2023.
Steady Capital Deployment Activities: BOKF has a 5-million share-repurchase plan. The company repurchased 1,632,401 shares in 2022 at an average price of $94.88 per share. It expects to buy back shares opportunistically, while maintaining its strong capital position. It has been increasing dividend every year, with the latest hike of 1.9% announced in November 2022. Its payout ratio seems favorable than the broader industry. Hence, these capital-deployment activities seem quite sustainable.
Over the past 30 days, S&T Bancorp witnessed a 3.3% upward revision in earnings estimates for 2023. STBA’s shares have risen 8.4% over the past six months.
The consensus mark for BFC’s 2023 earnings has been unchanged over the past month. Over the past six months, BFC’s shares have lost 5.3%.
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4 Reasons Why BOK Financial (BOKF) Stock is Worth Buying
In light of the regional banking crisis following the Silicon Valley Bank collapse, investors seem worried about the industry’s ability to navigate the pressure of higher interest rates, which are generally boons for banks. Despite this, there are a number of bank stocks worth considering, based on strong fundamentals and prospects. One such stock is BOK Financial Corporation (BOKF - Free Report) .
The company has been working to diversify its loan portfolio to healthcare and service lending. Robust pipeline will further drive loan growth. Increase in loan demand is expected to result in solid top-line improvement. Also, a strong credit position may enable BOKF to navigate any economic uncertainty and deploy capital to enhance shareholders’ value.
BOKF currently carries a Zacks Rank #2 (Buy). The company’s shares have fallen 6.8% over the past six months compared with the industry's 21.5% decline.
Image Source: Zacks Investment Research
What Makes BOKF an Attractive Pick?
Earnings Growth: In the past three to five years, BOKF recorded earnings growth of 6%. The momentum is expected to continue in the near term. The company’s earnings are expected to rise 21.4% for 2023, rewarding long-term investors.
BOKF also has a decent earnings surprise history. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 6.58%.
Balance Sheet Strength: BOK Financial is able to post continuous loan growth on a diverse business model and increased loans to individuals. Loans witnessed a compound annual growth rate (CAGR) of 1% in the last five years (2018-2022). Deposits have showcased a growing trend, seeing a five-year CAGR of 8.1% through 2018-2022. We believe that the company will be well-poised for organic growth on the back of strong loan pipeline and business-in-migration from other markets.
Higher Net Interest Income (NII): BOK Financial’s NII and the yield on interest-earning assets are expected to witness robust growth on high rates and solid loan demand. The company projects $1.4 billion NII for 2023.
Steady Capital Deployment Activities: BOKF has a 5-million share-repurchase plan. The company repurchased 1,632,401 shares in 2022 at an average price of $94.88 per share. It expects to buy back shares opportunistically, while maintaining its strong capital position. It has been increasing dividend every year, with the latest hike of 1.9% announced in November 2022. Its payout ratio seems favorable than the broader industry. Hence, these capital-deployment activities seem quite sustainable.
Other Stocks to Consider
A couple of other top-ranked stocks from the finance space are S&T Bancorp, Inc. (STBA - Free Report) and Bank First National (BFC - Free Report) . Both STBA and BFC carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past 30 days, S&T Bancorp witnessed a 3.3% upward revision in earnings estimates for 2023. STBA’s shares have risen 8.4% over the past six months.
The consensus mark for BFC’s 2023 earnings has been unchanged over the past month. Over the past six months, BFC’s shares have lost 5.3%.