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What Makes TCF Financial (TCB) a Hot Pick for Investors Now?
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TCF Financial Corporation can be a solid bet now, on the back of its increasing loans and strong deposit mix, along with diligent expansion moves. Furthermore, the bank’s focus on improving credit quality in consumer real estate portfolio is encouraging.
In addition, the recent hike in interest rate is likely to stabilize the top line, which will create a buying opportunity for long-term horses. Though increasing risk and compliance requirements remain a concern for TCF Financial, given the strictly regulated nature of banking operations, management has been taking steps to tackle expense growth resulting in positive operating leverage throughout 2016. This, in turn, is likely to make the growth path smoother.
Thus, it’s a good idea to add stocks with robust fundamentals and long-term growth opportunities to your portfolio, at the current level.
With $21.4 billion in assets as of Dec 31, 2016, TCF Financial’s strengths include organic growth, sound expansion moves and financial leverage.
7 Reasons Why TCF Financial is a Must Buy
Earnings Strength: TCF Financial witnessed historical (3–5 years) earnings per share growth of 2.99% compared with 8.84% growth recorded by the industry. In addition, the company’s estimated long-term EPS growth rate of 6.67% promises rewards for investors.
Revenue Growth: TCF Financial continues to make steady progress toward improving its top line, with sales recording 4-year compounded annual growth rate (‘CAGR’) of around 3.3% during 2013–2016. Further, the company’s projected sales growth (F1/F0) of 3.83% (as against the industry average of about 2.45%) indicates constant upward momentum in revenues.
Expansion Moves: TCF Financial has been focused on expansion and digitalization of its services, as per current demand of customers. In Feb 2016, the company announced its plans to shut down 33 retail branches located inside the Jewel-Osco grocery stores in Chicago and substitute these branches with advanced ATMs. The new agreement is in line with TCF Financial’s strategy to fortify its footprint in the Chicago region. Apart from branch closure and increasing ATM locations, the agreement also calls for improvement of retail branches and digital platforms.
Leverage: TCF Financial’s debt/equity ratio stands at 0.49 against the S&P 500 average of 0.70, reflecting lower debt burden compared with the industry. It highlights the company’s sound financial flexibility.
Favorable Zacks Rank: TCF Financial currently carries a Zacks Rank #2 (Buy). This has been driven by upward earnings estimates revisions over the last 30 days. For 2017 and 2018, the Zacks Consensus Estimate inched up 1.7% and about 1% to $1.23 and $1.38, respectively.
Stock is Undervalued: TCF Financial has a P/B ratio of 1.33x compared to the industry average of 1.66x. The P/E ratio of the company is 13.68x as compared with the industry average of 17.07x. Based on these ratios, the stock seems undervalued.
Share Price Movement: TCF Financial’s shares gained 14.4% over the last six months compared with 25.0% growth recorded by the Zacks categorized Midwest Banks industry.
Northern Trust Corporation (NTRS - Free Report) has been witnessing upward estimate revisions for the last 30 days, with the company’s shares rising nearly 19.8% over the last six months. It presently holds a Zacks Rank #2.
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 30 days. Over the last six months, the company’s share price has been up more than 44%. It also carries a Zacks Rank #2.
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What Makes TCF Financial (TCB) a Hot Pick for Investors Now?
TCF Financial Corporation can be a solid bet now, on the back of its increasing loans and strong deposit mix, along with diligent expansion moves. Furthermore, the bank’s focus on improving credit quality in consumer real estate portfolio is encouraging.
In addition, the recent hike in interest rate is likely to stabilize the top line, which will create a buying opportunity for long-term horses. Though increasing risk and compliance requirements remain a concern for TCF Financial, given the strictly regulated nature of banking operations, management has been taking steps to tackle expense growth resulting in positive operating leverage throughout 2016. This, in turn, is likely to make the growth path smoother.
Thus, it’s a good idea to add stocks with robust fundamentals and long-term growth opportunities to your portfolio, at the current level.
With $21.4 billion in assets as of Dec 31, 2016, TCF Financial’s strengths include organic growth, sound expansion moves and financial leverage.
7 Reasons Why TCF Financial is a Must Buy
Earnings Strength: TCF Financial witnessed historical (3–5 years) earnings per share growth of 2.99% compared with 8.84% growth recorded by the industry. In addition, the company’s estimated long-term EPS growth rate of 6.67% promises rewards for investors.
Revenue Growth: TCF Financial continues to make steady progress toward improving its top line, with sales recording 4-year compounded annual growth rate (‘CAGR’) of around 3.3% during 2013–2016. Further, the company’s projected sales growth (F1/F0) of 3.83% (as against the industry average of about 2.45%) indicates constant upward momentum in revenues.
Expansion Moves: TCF Financial has been focused on expansion and digitalization of its services, as per current demand of customers. In Feb 2016, the company announced its plans to shut down 33 retail branches located inside the Jewel-Osco grocery stores in Chicago and substitute these branches with advanced ATMs. The new agreement is in line with TCF Financial’s strategy to fortify its footprint in the Chicago region. Apart from branch closure and increasing ATM locations, the agreement also calls for improvement of retail branches and digital platforms.
Leverage: TCF Financial’s debt/equity ratio stands at 0.49 against the S&P 500 average of 0.70, reflecting lower debt burden compared with the industry. It highlights the company’s sound financial flexibility.
Favorable Zacks Rank: TCF Financial currently carries a Zacks Rank #2 (Buy). This has been driven by upward earnings estimates revisions over the last 30 days. For 2017 and 2018, the Zacks Consensus Estimate inched up 1.7% and about 1% to $1.23 and $1.38, respectively.
Stock is Undervalued: TCF Financial has a P/B ratio of 1.33x compared to the industry average of 1.66x. The P/E ratio of the company is 13.68x as compared with the industry average of 17.07x. Based on these ratios, the stock seems undervalued.
Share Price Movement: TCF Financial’s shares gained 14.4% over the last six months compared with 25.0% growth recorded by the Zacks categorized Midwest Banks industry.
Stocks to Consider
Comerica Incorporated (CMA - Free Report) has been witnessing upward estimate revisions for the last 30 days. Further, the stock surged over 39% over the past six months. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Northern Trust Corporation (NTRS - Free Report) has been witnessing upward estimate revisions for the last 30 days, with the company’s shares rising nearly 19.8% over the last six months. It presently holds a Zacks Rank #2.
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 30 days. Over the last six months, the company’s share price has been up more than 44%. It also carries a Zacks Rank #2.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>