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SunTrust Raises Dividend: Right Time to Own the Stock?
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As expected by the markets, SunTrust Banks, Inc. (STI - Free Report) announced a hike in its common stock dividend. This followed the approval of its 2016 capital plan by the Federal Reserve in June.
SunTrust declared a quarterly cash dividend of 26 cents per share, up 8.3% from the prior payout. The dividend will be paid on Sep 15 to shareholders of record as on Aug 31. Based on the last day’s closing price of $42.58 per share, the dividend yield stands at 2.44%.
In the last one month, several other major regional banks including Bank of America Corporation (BAC - Free Report) , Comerica Inc. (CMA - Free Report) and BB&T Corp. increased their quarterly dividends (as part of their 2016 capital plan) in the range of 4.5–50%.
Additionally, SunTrust’s capital plan includes authorization to repurchase $960 million worth of shares, through the second quarter of 2017.
Is SunTrust Worth Adding to Your Portfolio?
Are you contemplating investment in this value enhancing Zacks Rank #3 (Hold) stock? Before taking any investment decision, let’s have a look at the company’s fundamentals and growth prospects.
Earnings Strength: SunTrust depicts stable earnings. The company surpassed the Zacks Consensus Estimate in all the four trailing quarters, with an average beat of 9.48%.
Further, the company’s earnings are projected to grow at the rate of 5.9% over the long term.
Expense Management: SunTrust’s cost-saving measures have borne results as it continues to witness a downtrend in expenses. Non-interest expenses declined at a 3-year CAGR (2013–2015) of 5.9%. Though the trend reversed in the first half of 2016, this was in sync with management’s projection of expense rise in 2016, given the company’s efforts to enhance revenue growth.
Price-to-Equity (P/E) Ratio: SunTrust’s P/E ratio stands at 12.08 compared with the industry average of 12.68, indicating that the stock is underpriced.
Leverage: SunTrust’s debt/equity ratio stands at 0.53 compared with the industry average of 0.93, indicating lower debt level relative to the industry.
Value Score: SunTrust is currently trading more than 5% below its 52-week high price of $45.24 per share. Also, the company has a Value Style Score of ‘B’.
The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank of #1 (Strong Buy) or #2 (Buy), offer the best upside potential.
Share Price Movement: Over the last one year, SunTrust’s share price has witnessed a downtrend, falling over 3%.
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SunTrust Raises Dividend: Right Time to Own the Stock?
As expected by the markets, SunTrust Banks, Inc. (STI - Free Report) announced a hike in its common stock dividend. This followed the approval of its 2016 capital plan by the Federal Reserve in June.
SunTrust declared a quarterly cash dividend of 26 cents per share, up 8.3% from the prior payout. The dividend will be paid on Sep 15 to shareholders of record as on Aug 31. Based on the last day’s closing price of $42.58 per share, the dividend yield stands at 2.44%.
In the last one month, several other major regional banks including Bank of America Corporation (BAC - Free Report) , Comerica Inc. (CMA - Free Report) and BB&T Corp. increased their quarterly dividends (as part of their 2016 capital plan) in the range of 4.5–50%.
Additionally, SunTrust’s capital plan includes authorization to repurchase $960 million worth of shares, through the second quarter of 2017.
Is SunTrust Worth Adding to Your Portfolio?
Are you contemplating investment in this value enhancing Zacks Rank #3 (Hold) stock? Before taking any investment decision, let’s have a look at the company’s fundamentals and growth prospects.
Earnings Strength: SunTrust depicts stable earnings. The company surpassed the Zacks Consensus Estimate in all the four trailing quarters, with an average beat of 9.48%.
SUNTRUST BKS Price and EPS Surprise
SUNTRUST BKS Price and EPS Surprise | SUNTRUST BKS Quote
Further, the company’s earnings are projected to grow at the rate of 5.9% over the long term.
Expense Management: SunTrust’s cost-saving measures have borne results as it continues to witness a downtrend in expenses. Non-interest expenses declined at a 3-year CAGR (2013–2015) of 5.9%. Though the trend reversed in the first half of 2016, this was in sync with management’s projection of expense rise in 2016, given the company’s efforts to enhance revenue growth.
Price-to-Equity (P/E) Ratio: SunTrust’s P/E ratio stands at 12.08 compared with the industry average of 12.68, indicating that the stock is underpriced.
Leverage: SunTrust’s debt/equity ratio stands at 0.53 compared with the industry average of 0.93, indicating lower debt level relative to the industry.
Value Score: SunTrust is currently trading more than 5% below its 52-week high price of $45.24 per share. Also, the company has a Value Style Score of ‘B’.
The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’, when combined with Zacks Rank of #1 (Strong Buy) or #2 (Buy), offer the best upside potential.
Share Price Movement: Over the last one year, SunTrust’s share price has witnessed a downtrend, falling over 3%.
SUNTRUST BKS Price
SUNTRUST BKS Price | SUNTRUST BKS Quote
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