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6 Reasons to Add State Street (STT) Stock to Your Portfolio Now
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At present, banking sector is news for all the right reasons. The possibility of another rate hike in the near future continues to dominate the headlines.
Further, banking stocks are showing resilience and confronting the macro issues upfront. So, we thought of bringing up a stock from the sector that reflects strong fundamentals, upbeat outlook and solid long-term growth opportunity.
State Street Corporation (STT - Free Report) is one such major regional bank, with a market capitalization of $27.6 billion. In the recently concluded quarter, the company’s earnings outpaced the Zacks Consensus Estimate. Moreover, State Street has an impressive earnings surprise history. You can see that in the chart below:
Further, State Street has a number of other aspects that make it an attractive investment option.
Revenue Strength: State Street has been witnessing consistent improvement in revenues. Over the past five years (2011–2015), total revenues recorded a CAGR of 2%. Continuous investment in new products, new business wins and the GE Asset Management acquisition will further strengthen the company’s revenue generation in the quarters ahead.
Additionally, the company’s projected sales growth (F1/F0) of 2.5% ensures continuation of the upward revenue trend.
Earnings per Share Growth: State Street has witnessed earnings per share CAGR of 4.3% over the last five years (2011–2015). Further, this earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth (F1/F0) of 2.7%.
Also, its long-term (3–5 years) estimated EPS growth rate of 7.3% promises rewards for investors in the long run.
Strong Leverage: State Street’s debt/equity ratio stands at 0.63 compared to the industry average of 0.93, indicating relatively lower debt burden. It indicates the financial stability of the company even in adverse economic conditions.
Superior Return on Equity (ROE): State Street’s ROE of 10.70%, as compared with the industry average of 8.65%, mirrors the company’s commendable position over its peers.
Favorable Zacks Rank: State Street currently sports a Zacks Rank #2 (Buy). This is driven by upward revisions in the Zacks Consensus Estimate over the last 60 days, which rose 5% for 2016 and 4.7% for 2017.
Rising Share Price: State Street’s share price has witnessed an uptrend, year to date, surging over 6%.
Other stocks in the finance sector worth a look include Comerica Inc. (CMA - Free Report) , Raymond James Financial, Inc. (RJF - Free Report) and Federated Investors, Inc. . All three stocks hold the same Zacks Rank as State Street.
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6 Reasons to Add State Street (STT) Stock to Your Portfolio Now
At present, banking sector is news for all the right reasons. The possibility of another rate hike in the near future continues to dominate the headlines.
Further, banking stocks are showing resilience and confronting the macro issues upfront. So, we thought of bringing up a stock from the sector that reflects strong fundamentals, upbeat outlook and solid long-term growth opportunity.
State Street Corporation (STT - Free Report) is one such major regional bank, with a market capitalization of $27.6 billion. In the recently concluded quarter, the company’s earnings outpaced the Zacks Consensus Estimate. Moreover, State Street has an impressive earnings surprise history. You can see that in the chart below:
STATE ST CORP Price and EPS Surprise
STATE ST CORP Price and EPS Surprise | STATE ST CORP Quote
Further, State Street has a number of other aspects that make it an attractive investment option.
Revenue Strength: State Street has been witnessing consistent improvement in revenues. Over the past five years (2011–2015), total revenues recorded a CAGR of 2%. Continuous investment in new products, new business wins and the GE Asset Management acquisition will further strengthen the company’s revenue generation in the quarters ahead.
Additionally, the company’s projected sales growth (F1/F0) of 2.5% ensures continuation of the upward revenue trend.
Earnings per Share Growth: State Street has witnessed earnings per share CAGR of 4.3% over the last five years (2011–2015). Further, this earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth (F1/F0) of 2.7%.
Also, its long-term (3–5 years) estimated EPS growth rate of 7.3% promises rewards for investors in the long run.
Strong Leverage: State Street’s debt/equity ratio stands at 0.63 compared to the industry average of 0.93, indicating relatively lower debt burden. It indicates the financial stability of the company even in adverse economic conditions.
Superior Return on Equity (ROE): State Street’s ROE of 10.70%, as compared with the industry average of 8.65%, mirrors the company’s commendable position over its peers.
Favorable Zacks Rank: State Street currently sports a Zacks Rank #2 (Buy). This is driven by upward revisions in the Zacks Consensus Estimate over the last 60 days, which rose 5% for 2016 and 4.7% for 2017.
Rising Share Price: State Street’s share price has witnessed an uptrend, year to date, surging over 6%.
STATE ST CORP Price
STATE ST CORP Price | STATE ST CORP Quote
Other Stocks to Consider
Other stocks in the finance sector worth a look include Comerica Inc. (CMA - Free Report) , Raymond James Financial, Inc. (RJF - Free Report) and Federated Investors, Inc. . All three stocks hold the same Zacks Rank as State Street.
Confidential from Zacks Beyond this Industry Outlook, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>