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Why Synovus (SNV) Should be Added to Your Portfolio Now
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In the Q1 earnings season, the Finance sector turned out to be one of the best performers. So, we thought of bringing up a stock from the sector that reflects strong fundamentals and solid long-term growth opportunities.
Particularly, Synovus Financial Corp. (SNV - Free Report) is one such stock that not only beat estimates this time, but has also been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 8.0% and 6.0%, respectively.
Synovus can be a solid bet now on the back of its organic and inorganic growth strategies which have placed it well for the future. Moreover, Synovus’ focus on balance-sheet growth is encouraging.
Further, the impending interest rate hike is anticipated to bring further stability to the top line. This, in turn, is likely to attract long-term investors. Strict regulations and technology costs to meet customers’ needs have been escalating expenses for Synovus. However, sharper focus on reducing expenses by reorganizing business and improving revenues will help in boosting the bottom line.
Therefore, at present, it’s a good idea to add stocks with robust fundamentals and long-term prospects to your portfolio.
In addition, shares of this Zacks Rank #2 (Buy) stock have gained 5.3% in the last six months, outperforming 0.6% growth recorded by the Zacks categorized Southeast Banks industry.
5 Reasons Why Synovus is a Must Buy
Revenue Growth: Organic growth remains a key catalyst for Synovus, with its net interest income growing at a Compound Annual Growth Rate (CAGR) of 3.5% over the last four years (2013–2016). Also, loans have increased at a CAGR of 6% for the last four years (2013–2016). In first-quarter 2017, the increasing trend continued for both loans and NII.
Additionally, the company’s projected sales growth (F1/F0) of 10.42% (compared with 1.74% growth for the industry) ensures continuation of the uptrend in top line.
Earnings Strength: Synovus has witnessed historical (3–5 years) earnings per share growth of 28.32% compared with 11.68% for the industry. In addition, the company’s estimated long-term EPS growth rate of 8.0% promises rewards for investors. Synovus also recorded an average positive earnings surprise of 5.48%, over the trailing four quarters.
Steady Capital Deployment: Synovus remains committed toward creating value for its shareholders through dividend hikes, share buybacks and acquisitions, thereby reflecting strong balance-sheet position. In Oct 2016, the company acquired Entaire Global Companies, Inc. Recently, the company agreed to buy Cabela's banking operation. Furthermore, the board of directors plans to repurchase up to $200 million shares in 2017. Also, in Mar 2017, a 25% hike in quarterly dividend was announced.
Superior Return on Equity (ROE): Synovus’ ROE of 8.64%, as compared with the industry average of 8.03%, indicates the company’s commendable position over its peers.
Stock is Undervalued: Synovus has a P/E and P/B ratio of 17.02x and 1.77x compared to the S&P 500 average of 18.41x and 3.15x. Based on these ratios, the stock seems undervalued.
Stocks to Consider
M&T Bank Corporation (MTB - 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 9%. It boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica Incorporated (CMA - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped over 10% over the past six months. It currently carries a Zacks Rank #2.
Northern Trust Corporation (NTRS - Free Report) has been witnessing upward estimate revisions for the last 30 days. Also, the company’s shares have risen nearly 6% over the last six months. It presently holds a Zacks Rank #2.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>
See More Zacks Research for These Tickers
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Why Synovus (SNV) Should be Added to Your Portfolio Now
In the Q1 earnings season, the Finance sector turned out to be one of the best performers. So, we thought of bringing up a stock from the sector that reflects strong fundamentals and solid long-term growth opportunities.
Particularly, Synovus Financial Corp. (SNV - Free Report) is one such stock that not only beat estimates this time, but has also been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 8.0% and 6.0%, respectively.
Synovus can be a solid bet now on the back of its organic and inorganic growth strategies which have placed it well for the future. Moreover, Synovus’ focus on balance-sheet growth is encouraging.
Further, the impending interest rate hike is anticipated to bring further stability to the top line. This, in turn, is likely to attract long-term investors. Strict regulations and technology costs to meet customers’ needs have been escalating expenses for Synovus. However, sharper focus on reducing expenses by reorganizing business and improving revenues will help in boosting the bottom line.
Therefore, at present, it’s a good idea to add stocks with robust fundamentals and long-term prospects to your portfolio.
In addition, shares of this Zacks Rank #2 (Buy) stock have gained 5.3% in the last six months, outperforming 0.6% growth recorded by the Zacks categorized Southeast Banks industry.
5 Reasons Why Synovus is a Must Buy
Revenue Growth: Organic growth remains a key catalyst for Synovus, with its net interest income growing at a Compound Annual Growth Rate (CAGR) of 3.5% over the last four years (2013–2016). Also, loans have increased at a CAGR of 6% for the last four years (2013–2016). In first-quarter 2017, the increasing trend continued for both loans and NII.
Additionally, the company’s projected sales growth (F1/F0) of 10.42% (compared with 1.74% growth for the industry) ensures continuation of the uptrend in top line.
Earnings Strength: Synovus has witnessed historical (3–5 years) earnings per share growth of 28.32% compared with 11.68% for the industry. In addition, the company’s estimated long-term EPS growth rate of 8.0% promises rewards for investors. Synovus also recorded an average positive earnings surprise of 5.48%, over the trailing four quarters.
Steady Capital Deployment: Synovus remains committed toward creating value for its shareholders through dividend hikes, share buybacks and acquisitions, thereby reflecting strong balance-sheet position. In Oct 2016, the company acquired Entaire Global Companies, Inc. Recently, the company agreed to buy Cabela's banking operation. Furthermore, the board of directors plans to repurchase up to $200 million shares in 2017. Also, in Mar 2017, a 25% hike in quarterly dividend was announced.
Superior Return on Equity (ROE): Synovus’ ROE of 8.64%, as compared with the industry average of 8.03%, indicates the company’s commendable position over its peers.
Stock is Undervalued: Synovus has a P/E and P/B ratio of 17.02x and 1.77x compared to the S&P 500 average of 18.41x and 3.15x. Based on these ratios, the stock seems undervalued.
Stocks to Consider
M&T Bank Corporation (MTB - 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 9%. It boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comerica Incorporated (CMA - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped over 10% over the past six months. It currently carries a Zacks Rank #2.
Northern Trust Corporation (NTRS - Free Report) has been witnessing upward estimate revisions for the last 30 days. Also, the company’s shares have risen nearly 6% over the last six months. It presently holds a Zacks Rank #2.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>