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6 Reasons to Add People's United (PBCT) to Your Portfolio
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With the focus on opportunistic acquisitions and growing deposit and loan balances, People's United Financial, Inc. appears a promising buying opportunity now. Further, the recent interest rate hike is anticipated to bring further stability to top-line generation.
Though increasing risks and compliance requirements remain a concern for People's United; given the strictly regulated nature of banking operations, management is taking steps to tackle expense growth. This, in turn, is anticipated to make the growth path smoother.
Therefore, it’s a good idea to add stocks with robust fundamentals and long-term growth opportunities to your portfolio, at the current level.
Further, People's United’s shares have gained 22.8% over the last one-year period, compared with the 27.7% growth in the Zacks categorized Savings & Loan industry.
Why is People's United an Attractive Pick
Benefit from Rate Hike: With a rise in rates, banks are likely to engage in more investment activities. This rate hike will also allow the banks to lend at higher rates. As People's United currently derives around 74% of its revenues from net interest income, the company is set to benefit from the recent rate hike.
Strategic Moves: People’s United continues to benefit from a healthy business portfolio that has grown inorganically over time. In line with its strategy to boost fee income businesses, the company completed the acquisition of Gerstein Fisher, a $3-billion New York-based investment management firm. Previously, in Jun 2016, it inked a $391-million all-stock deal to acquire Riverhead-based Suffolk Bancorp, which would fortify its footprint in the New York metro region. The company remains focused on opportunistic acquisitions that support its long-term growth profile.
Revenue Growth: People's United’s revenues reflected compounded annual growth rate (“CAGR”) of 3.9% over the last three years (2013–2015) and also depicted an uptrend in the first nine months of 2016. The company’s projected sales growth (F1/F0) of 4.7% (as against the nil industry average) highlights constant upward momentum in revenues.
Strong Capital Deployment Activities: People's United remains focused on managing capital levels efficiently. In Apr 2016, the company raised its quarterly dividend to 17 cents, marking the 23rd consecutive annual dividend hike. In addition, the company recorded dividend payout ratio of 75.1% during the first nine months of 2016.
Favorable Zacks Rank: People's United currently carries a Zacks Rank #2 (Buy). The bullish rank is driven by the upward earnings estimate revisions for the last 60 days. For 2016, the Zacks Consensus Estimate advanced 1.1% to 92 cents; while for 2017, it climbed 1.1% to 96 cents.
Stock is Undervalued: People's United has a P/B ratio of 1.24x, compared to the industry average of 1.28x. Based on this ratio, the stock seems undervalued.
Key Picks
Other stocks in the finance space worth considering include The Goldman Sachs Group, Inc. (GS - Free Report) , Zions Bancorporation (ZION - Free Report) and Comerica Incorporated (CMA - Free Report) .
Goldman has witnessed an upward earnings estimate revision of 2.1% for 2016, for the past 30 days. Its share price has risen 35.2% over the last one-year period. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica also boasts a Zacks Rank #1. Its Zacks Consensus Estimate for 2016 moved slightly upward, over the last 30 days. Its share price has surged 64.4% over the last one-year period.
Zions carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 3.8% for 2016, over the past 90 days. Over the last one-year period, its share price is up 61.1%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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6 Reasons to Add People's United (PBCT) to Your Portfolio
With the focus on opportunistic acquisitions and growing deposit and loan balances, People's United Financial, Inc. appears a promising buying opportunity now. Further, the recent interest rate hike is anticipated to bring further stability to top-line generation.
Though increasing risks and compliance requirements remain a concern for People's United; given the strictly regulated nature of banking operations, management is taking steps to tackle expense growth. This, in turn, is anticipated to make the growth path smoother.
Therefore, it’s a good idea to add stocks with robust fundamentals and long-term growth opportunities to your portfolio, at the current level.
Further, People's United’s shares have gained 22.8% over the last one-year period, compared with the 27.7% growth in the Zacks categorized Savings & Loan industry.
Why is People's United an Attractive Pick
Benefit from Rate Hike: With a rise in rates, banks are likely to engage in more investment activities. This rate hike will also allow the banks to lend at higher rates. As People's United currently derives around 74% of its revenues from net interest income, the company is set to benefit from the recent rate hike.
Strategic Moves: People’s United continues to benefit from a healthy business portfolio that has grown inorganically over time. In line with its strategy to boost fee income businesses, the company completed the acquisition of Gerstein Fisher, a $3-billion New York-based investment management firm. Previously, in Jun 2016, it inked a $391-million all-stock deal to acquire Riverhead-based Suffolk Bancorp, which would fortify its footprint in the New York metro region. The company remains focused on opportunistic acquisitions that support its long-term growth profile.
Revenue Growth: People's United’s revenues reflected compounded annual growth rate (“CAGR”) of 3.9% over the last three years (2013–2015) and also depicted an uptrend in the first nine months of 2016. The company’s projected sales growth (F1/F0) of 4.7% (as against the nil industry average) highlights constant upward momentum in revenues.
Strong Capital Deployment Activities: People's United remains focused on managing capital levels efficiently. In Apr 2016, the company raised its quarterly dividend to 17 cents, marking the 23rd consecutive annual dividend hike. In addition, the company recorded dividend payout ratio of 75.1% during the first nine months of 2016.
Favorable Zacks Rank: People's United currently carries a Zacks Rank #2 (Buy). The bullish rank is driven by the upward earnings estimate revisions for the last 60 days. For 2016, the Zacks Consensus Estimate advanced 1.1% to 92 cents; while for 2017, it climbed 1.1% to 96 cents.
Stock is Undervalued: People's United has a P/B ratio of 1.24x, compared to the industry average of 1.28x. Based on this ratio, the stock seems undervalued.
Key Picks
Other stocks in the finance space worth considering include The Goldman Sachs Group, Inc. (GS - Free Report) , Zions Bancorporation (ZION - Free Report) and Comerica Incorporated (CMA - Free Report) .
Goldman has witnessed an upward earnings estimate revision of 2.1% for 2016, for the past 30 days. Its share price has risen 35.2% over the last one-year period. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica also boasts a Zacks Rank #1. Its Zacks Consensus Estimate for 2016 moved slightly upward, over the last 30 days. Its share price has surged 64.4% over the last one-year period.
Zions carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 3.8% for 2016, over the past 90 days. Over the last one-year period, its share price is up 61.1%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>