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4 Reasons Why SunTrust (STI) Stock Seems a Good Pick Now
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Banking stocks have been on a rally since the Presidential election. Moreover, the promises made by Donald Trump regarding softer regulations, lower taxes and an improving rate scenario have injected further optimism.
Also, the Fed’s latest rate hike in mid-March, along with expectations of two more this year, is likely to improve margins for banks. Thus, the time is ripe to add a few banking stocks to your portfolio.
One such stock worth considering is SunTrust Banks, Inc. (STI - Free Report) , which is well positioned for growth, given its strong fundamentals.
This Zacks Rank #2 (Buy) stock has been witnessing upward estimate revisions for the current year, indicating analysts’ optimism on its growth prospects. In the last 60 days, the Zacks Consensus Estimate for 2017 inched up nearly 1% to $3.84.
Moreover, shares of the company gained 28% in 2016, outperforming the Zacks categorized Major Regional Banks industry’s growth of 19.4%.
Further, SunTrust has a number of other positives that make it an attractive investment option.
Earnings per Share (ESP) Growth: SunTrust witnessed EPS growth of 7.9% in the last 3–5 years. Moreover, earnings are projected to grow at the rate of 8.2% and 12.7% in 2017 and 2018, respectively.
Further, the company’s long-term (3–5 years) estimated EPS growth rate of 7.5% promises rewards for investors.
Revenue Strength: SunTrust has witnessed its revenues grow at a four-year (2013-2016) CAGR of 2.1%. Moreover, revenues are expected to increase by 5.7% in 2017, higher than the industry’s average growth of 5.3%. Also, projected sales growth for 2018 is 5.2%. Further, the rise in loan demand is expected to support revenue generation in the coming periods.
Effective Expense Management: SunTrust’s cost-saving initiatives yielded results, with non-interest expenses declining at a four-year (2013–2016) CAGR of 2.1%. The company remains undeterred in its efforts to enhance efficiency and targets an efficiency ratio below 60% by the end of 2019.
Strong Leverage: SunTrust’s debt/equity ratio stands at 0.52, compared with the industry average of 0.86, pointing to a relatively lower debt burden. This indicates the company’s financial stability even in adverse economic conditions.
Other Stocks to Consider
Some other stocks worth considering in the finance space are Evercore Partners Inc. (EVR - Free Report) , Bank of America Corporation (BAC - Free Report) and Comerica Incorporated (CMA - Free Report) .
Evercore Partners witnessed an upward earnings estimate revision of 6% for the current year, in the last 60 days. Its share price increased 48.5% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of America carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate was revised 1.2% upward. The company’s share price increased 49.7% in the last six months.
Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price increased nearly 40% in the last six months.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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4 Reasons Why SunTrust (STI) Stock Seems a Good Pick Now
Banking stocks have been on a rally since the Presidential election. Moreover, the promises made by Donald Trump regarding softer regulations, lower taxes and an improving rate scenario have injected further optimism.
Also, the Fed’s latest rate hike in mid-March, along with expectations of two more this year, is likely to improve margins for banks. Thus, the time is ripe to add a few banking stocks to your portfolio.
One such stock worth considering is SunTrust Banks, Inc. (STI - Free Report) , which is well positioned for growth, given its strong fundamentals.
This Zacks Rank #2 (Buy) stock has been witnessing upward estimate revisions for the current year, indicating analysts’ optimism on its growth prospects. In the last 60 days, the Zacks Consensus Estimate for 2017 inched up nearly 1% to $3.84.
Moreover, shares of the company gained 28% in 2016, outperforming the Zacks categorized Major Regional Banks industry’s growth of 19.4%.
Further, SunTrust has a number of other positives that make it an attractive investment option.
Earnings per Share (ESP) Growth: SunTrust witnessed EPS growth of 7.9% in the last 3–5 years. Moreover, earnings are projected to grow at the rate of 8.2% and 12.7% in 2017 and 2018, respectively.
Further, the company’s long-term (3–5 years) estimated EPS growth rate of 7.5% promises rewards for investors.
Revenue Strength: SunTrust has witnessed its revenues grow at a four-year (2013-2016) CAGR of 2.1%. Moreover, revenues are expected to increase by 5.7% in 2017, higher than the industry’s average growth of 5.3%. Also, projected sales growth for 2018 is 5.2%. Further, the rise in loan demand is expected to support revenue generation in the coming periods.
Effective Expense Management: SunTrust’s cost-saving initiatives yielded results, with non-interest expenses declining at a four-year (2013–2016) CAGR of 2.1%. The company remains undeterred in its efforts to enhance efficiency and targets an efficiency ratio below 60% by the end of 2019.
Strong Leverage: SunTrust’s debt/equity ratio stands at 0.52, compared with the industry average of 0.86, pointing to a relatively lower debt burden. This indicates the company’s financial stability even in adverse economic conditions.
Other Stocks to Consider
Some other stocks worth considering in the finance space are Evercore Partners Inc. (EVR - Free Report) , Bank of America Corporation (BAC - Free Report) and Comerica Incorporated (CMA - Free Report) .
Evercore Partners witnessed an upward earnings estimate revision of 6% for the current year, in the last 60 days. Its share price increased 48.5% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of America carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate was revised 1.2% upward. The company’s share price increased 49.7% in the last six months.
Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price increased nearly 40% in the last six months.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>