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Why BancorpSouth (BXS) Is an Impressive Stock to Buy Now

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Shares of BancorpSouth, Inc. have gained more than 30% so far this year, outperforming the S&P 500’s return of only 9.6%. The company’s progress on fundamentals, the Trump factor and the Fed’s recent monetary policy action actually made this possible.

The company’s underlying strength coupled with its Zacks Rank #2 (Buy) should help its stock moving higher in the near term.

The company continues to portray strength in several areas despite the increasingly difficult operating environment that is characterized by strict regulations.



Why the Surge May Continue

Inorganic Growth Prospects: Backed by solid liquidity position, the company continues to look forward to tap inorganic growth opportunities. In Apr 2014, BancorpSouth acquired the assets of Lafayette, LA-based Knox Insurance Group, LLC (Knox). Further, in Dec 2016, the company acquired certain assets of Waguespack & Associates Insurance, Inc., an independent insurance firm.

Efficient Expense Management: BancorpSouth has been able to manage expenses efficiently. The company is focused toward trimming headcounts and investing in revenue generating opportunities to boost bottom-line growth.

Impressive Capital Deployment: The company intends to deploy capital through share repurchases and M&A activity. It has historically complied with the regulatory requirement of capital levels and continues to enhance shareholders’ value through regular dividend payments. During the current year, the company announced a share repurchase program and raised its quarterly cash dividend by 25%. Such shareholder friendly approach will continue to boost investors’ confidence in the stock.

Superior Return on Equity (ROE): The company has an ROE of 8.2%, compared with the industry average of 7.9%. This indicates that the company uses shareholder capital more efficiently than its peers.

Other Stocks that Warrant a Look

Farmers Capital Bank Corporation : Over the last 90 days, the Zacks Consensus Estimate for the stock for the current year has moved up 8.8% to $2.36.

Investar Holding Corporation (ISTR - Free Report) : The Zacks Consensus Estimate for the stock for the current year has revised up 3.7% to $1.12 for the same time period.

Carolina Financial Corporation : The Zacks Consensus Estimate for the stock for the current year has climbed up 14.3% to $1.60 over the same time frame.

All the three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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