We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
6 Reasons to Add Cullen/Frost (CFR) Stock to Your Portfolio
Read MoreHide Full Article
Riding the positive market sentiments since Trump’s victory, banking stocks have been witnessing a rally. This is primarily driven by expectation of fewer regulations and lower tax rates under the new administration. Moreover, on the back of improving U.S economic conditions, the Federal Reserve has raised rates twice during the last three months.
Considering these positives, a stock from the banking space that might appear attractive to investors right now is Cullen/Frost Bankers, Inc. (CFR - Free Report) . The company’s strong fundamentals along with its impressive revenue growth and rising deposit and loan balances makes it ideal for investment.
Cullen/Frost currently carries a Zacks Rank #2 (Buy) backed by upward earnings estimate revision of nearly 1% over the last 60 days. Moreover, the company’s shares gained 52.8% in the past one year; outperforming the 42.3% gain for the Zacks categorized Banks - Southwest industry.
Key Factors Driving the Stock
Revenue Growth: Organic growth remains Cullen/Frost’s major strength. Revenues grew at a CAGR of 5.9%, over the last five years (2012–2016). The projected sales growth of the company for the current year is at 15.01% (as against the nil industry average), indicating a consistent increase in revenues.
Strong Leverage: Cullen/Frost’s debt/equity ratio is 0.08 compared with the industry average of 0.62. This indicates a lower debt burden relative to the industry and highlights its financial stability even amid an unstable economic environment.
Efficient Capital Deployment: Cullen/Frost has a steady capital deployment plan. In Apr 2016, the company hiked its quarterly stock dividend by 1.9%. Additionally, in Oct 2016, its board of directors approved a $100-million common stock repurchase program.
Impressive Cash Flow: Cullen/Frost’s historical (3-5 years) cash flow growth was consistent with the industry at 10.1%. Further, its current cash flow growth looks attractive at 9.3% compared with the industry’s growth of 4.9%.
Improving Return on Equity (ROE): The company’s current ROE is 10.35% compared with the industry average of 9.08%. This reflects the company’s strength in terms of efficiency in equity financing.
Valuation Looks Reasonable: Cullen/Frost has Value Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score which 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 #1 (Strong Buy) or #2, offer the best upside potential.
BancFirst Corporation witnessed upward earnings estimate revision of 0.4% over the past 60 days. Also, its share price is up 56.1% year to date.
Southside Bancshares’ earnings estimates moved north by roughly 3% over the past 60 days and its share price is up 23.6% year to date.
Texas Capital witnessed an upward earnings estimate revision of 4.9% over the past two months. Its share price surged 112.1% year to date.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
6 Reasons to Add Cullen/Frost (CFR) Stock to Your Portfolio
Riding the positive market sentiments since Trump’s victory, banking stocks have been witnessing a rally. This is primarily driven by expectation of fewer regulations and lower tax rates under the new administration. Moreover, on the back of improving U.S economic conditions, the Federal Reserve has raised rates twice during the last three months.
Considering these positives, a stock from the banking space that might appear attractive to investors right now is Cullen/Frost Bankers, Inc. (CFR - Free Report) . The company’s strong fundamentals along with its impressive revenue growth and rising deposit and loan balances makes it ideal for investment.
Cullen/Frost currently carries a Zacks Rank #2 (Buy) backed by upward earnings estimate revision of nearly 1% over the last 60 days. Moreover, the company’s shares gained 52.8% in the past one year; outperforming the 42.3% gain for the Zacks categorized Banks - Southwest industry.
Key Factors Driving the Stock
Revenue Growth: Organic growth remains Cullen/Frost’s major strength. Revenues grew at a CAGR of 5.9%, over the last five years (2012–2016). The projected sales growth of the company for the current year is at 15.01% (as against the nil industry average), indicating a consistent increase in revenues.
Strong Leverage: Cullen/Frost’s debt/equity ratio is 0.08 compared with the industry average of 0.62. This indicates a lower debt burden relative to the industry and highlights its financial stability even amid an unstable economic environment.
Efficient Capital Deployment: Cullen/Frost has a steady capital deployment plan. In Apr 2016, the company hiked its quarterly stock dividend by 1.9%. Additionally, in Oct 2016, its board of directors approved a $100-million common stock repurchase program.
Impressive Cash Flow: Cullen/Frost’s historical (3-5 years) cash flow growth was consistent with the industry at 10.1%. Further, its current cash flow growth looks attractive at 9.3% compared with the industry’s growth of 4.9%.
Improving Return on Equity (ROE): The company’s current ROE is 10.35% compared with the industry average of 9.08%. This reflects the company’s strength in terms of efficiency in equity financing.
Valuation Looks Reasonable: Cullen/Frost has Value Score of ‘B’. The Value Style Score condenses all valuation metrics into one actionable score which 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 #1 (Strong Buy) or #2, offer the best upside potential.
Other Stocks to Consider
Some stocks worth considering from the same space are BancFirst Corporation (BANF - Free Report) , Southside Bancshares, Inc. (SBSI - Free Report) and Texas Capital Bancshares, Inc. (TCBI - Free Report) . All these stocks carry the same rank as Cullen/Frost Bankers. You can see the complete list of today’s Zacks #1 Rank stocks here.
BancFirst Corporation witnessed upward earnings estimate revision of 0.4% over the past 60 days. Also, its share price is up 56.1% year to date.
Southside Bancshares’ earnings estimates moved north by roughly 3% over the past 60 days and its share price is up 23.6% year to date.
Texas Capital witnessed an upward earnings estimate revision of 4.9% over the past two months. Its share price surged 112.1% year to date.
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 >>