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5 Reasons to Add Raymond James (RJF) to Your Portfolio Now
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Raymond James Financial, Inc. (RJF - Free Report) remains well positioned for organic as well as inorganic growth, given its persistent improvement in loan balances and a solid balance sheet and capital position.
Moreover, shares of the company have rallied 19.5% so far this year, outperforming the industry’s gain of 6.7%.
Also, the Zacks Consensus Estimate for current-year earnings has moved nearly 1.4% upward over the past 30 days, reflecting analysts’ optimism about its earnings growth potential. As a result, the stock currently has a Zacks Rank #2 (Buy).
Given the rising estimates and a solid Zacks Rank, we believe the stock still has upside potential left.
There are a number of other factors, which make Raymond James an attractive investment option now. A few of them are mentioned below.
Earnings Per Share (EPS) Growth: Over the past three to five years, Raymond James witnessed EPS growth of 12.3%, higher than the industry’s growth of 8.3%. Notably, the company has a strong earnings surprise history, having delivered positive surprises in each of the trailing four quarters, with an average beat of 8.1%.
Further, the company’s earnings are projected to grow 12.5% and 7.9% in fiscal 2017 and fiscal 2018, respectively. Also, its long-term (three to five years) estimated EPS growth rate of 17% promises rewards for investors.
Revenue Strength: Raymond James remains focused on enhancing revenue growth. Its strategy to grow inorganically is paying off well. Also, the company has been witnessing a rise in loan balances.
Moreover, the company’s projected sales growth (F1/F0) of 11.2% (compared with nil for the industry) ensures continuation of the upward trend.
Superior Return on Equity (ROE): Raymond James’ ROE is 13.97%, higher than the industry average of 9.42%. This reflects its superiority in terms of utilizing funds.
Synergies from Acquisitions: Raymond James’ growth has been reflected in several successful acquisitions over the last few years. Specifically, in calendar year 2016, the company acquired German-based Mummert & Company Corporate Finance GmbH, Canadian investment firm MacDougall, MacDougall &MacTier Inc. (also known as 3Macs) and the U.S. Private Client Services unit of Deutsche Asset & Wealth Management. Also, in April 2017, it agreed to acquire UMB Financial’s subsidiary. These deals are expected to support the company’s profitability going forward.
Stock Seems Undervalued: Raymond James stock looks undervalued with respect to its price-to-earnings (P/E) ratio. It has a P/E (F1) ratio of 14.11 compared with the industry average of 18.43.
Also, the stock currently has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Earnings estimates for Interactive Brokers have been revised 5.8% upward for 2017 over the past 30 days. Its share price has risen more than 57% over the last six months.
Stifel Financial’s earnings estimates have been revised upward by 1.5% for the current year in the past 30 days. Also over the last six months, its share price has increased 16.7%.
TD Ameritrade has witnessed an upward earnings estimate revision of 11.7% for the current fiscal year in the past 30 days. Also, its share price has seen a 35.5% rise over the last six months.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can 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.
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5 Reasons to Add Raymond James (RJF) to Your Portfolio Now
Raymond James Financial, Inc. (RJF - Free Report) remains well positioned for organic as well as inorganic growth, given its persistent improvement in loan balances and a solid balance sheet and capital position.
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Moreover, shares of the company have rallied 19.5% so far this year, outperforming the industry’s gain of 6.7%.
Also, the Zacks Consensus Estimate for current-year earnings has moved nearly 1.4% upward over the past 30 days, reflecting analysts’ optimism about its earnings growth potential. As a result, the stock currently has a Zacks Rank #2 (Buy).
Given the rising estimates and a solid Zacks Rank, we believe the stock still has upside potential left.
There are a number of other factors, which make Raymond James an attractive investment option now. A few of them are mentioned below.
Earnings Per Share (EPS) Growth: Over the past three to five years, Raymond James witnessed EPS growth of 12.3%, higher than the industry’s growth of 8.3%. Notably, the company has a strong earnings surprise history, having delivered positive surprises in each of the trailing four quarters, with an average beat of 8.1%.
Further, the company’s earnings are projected to grow 12.5% and 7.9% in fiscal 2017 and fiscal 2018, respectively. Also, its long-term (three to five years) estimated EPS growth rate of 17% promises rewards for investors.
Revenue Strength: Raymond James remains focused on enhancing revenue growth. Its strategy to grow inorganically is paying off well. Also, the company has been witnessing a rise in loan balances.
Moreover, the company’s projected sales growth (F1/F0) of 11.2% (compared with nil for the industry) ensures continuation of the upward trend.
Superior Return on Equity (ROE): Raymond James’ ROE is 13.97%, higher than the industry average of 9.42%. This reflects its superiority in terms of utilizing funds.
Synergies from Acquisitions: Raymond James’ growth has been reflected in several successful acquisitions over the last few years. Specifically, in calendar year 2016, the company acquired German-based Mummert & Company Corporate Finance GmbH, Canadian investment firm MacDougall, MacDougall &MacTier Inc. (also known as 3Macs) and the U.S. Private Client Services unit of Deutsche Asset & Wealth Management. Also, in April 2017, it agreed to acquire UMB Financial’s subsidiary. These deals are expected to support the company’s profitability going forward.
Stock Seems Undervalued: Raymond James stock looks undervalued with respect to its price-to-earnings (P/E) ratio. It has a P/E (F1) ratio of 14.11 compared with the industry average of 18.43.
Also, the stock currently has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Other Stocks Worth a Look
Some other stocks worth considering in the same industry are Interactive Brokers Group, Inc. (IBKR - Free Report) , Stifel Financial Corporation (SF - Free Report) and TD Ameritrade Holding Corporation (AMTD - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for Interactive Brokers have been revised 5.8% upward for 2017 over the past 30 days. Its share price has risen more than 57% over the last six months.
Stifel Financial’s earnings estimates have been revised upward by 1.5% for the current year in the past 30 days. Also over the last six months, its share price has increased 16.7%.
TD Ameritrade has witnessed an upward earnings estimate revision of 11.7% for the current fiscal year in the past 30 days. Also, its share price has seen a 35.5% rise over the last six months.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can 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.
Click here for Zacks' private trades >>