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6 Reasons That Make BancFirst an Investment-Worthy Stock
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A favorable operating backdrop with rising interest rates, lower commercial tax rate and ease in regulations should continue to support banking stocks. With this in mind, we have chosen BancFirst Corporation (BANF - Free Report) for your consideration.
The company benefits from its strong balance sheet position and robust organic growth. Also, its earnings growth prospects keep us encouraged.
Also, BancFirst has a decent earnings surprise history. It surpassed the Zacks Consensus Estimate in two of the trailing four quarters with an average beat of 3.3%.
Further, it has been successful in gaining analysts’ confidence. Its current-year earnings estimates have revised 3.1% upward, over the last 60 days. As a result, the stock carries a Zacks Rank #2 (Buy).
Shares of BancFirst have gained 26.8% so far this year, significantly outperforming the industry’s growth of 1.6%.
Here’s What Might Drive the Stock Higher
Earnings Strength: While BancFirst’s historical earnings per share (EPS) growth rate of 11.8% compares favorably with the industry average of 8.8%, investors should really focus on projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 35.3%, higher than the industry average of 24.1%.
Further, the long-term (three-five years) expected EPS growth rate of 10% promises rewards for shareholders.
Revenue Growth: Organic growth remains strong at BancFirst. Revenues witnessed a compound annual growth rate (CAGR) of 8% over the last five years (ended 2017). Also, the company’s net interest margin has expanded 40 basis points in the same time period, supporting the company’s interest income. The uptrend in revenues continued in the first six months of 2018. Further, the top line is expected to increase 10.7% in the year compared with no growth for the industry.
Impressive Balance Sheet Growth: The company’s loans and deposits have witnessed a CAGR of 8.7% and 4.3%, respectively, over a five-year period (ended 2017). Thus, a strong balance sheet position enables BancFirst to undertake any opportunistic expansion moves.
Improving Credit Quality: BancFirst’s credit quality has improved significantly over the years. In 2017, the ratio of nonperforming and restructured loans to total loans declined to 0.84% from 0.98% in 2013. Also, the ratio of allowance for loan losses to total loans came in at 1.09% compared with 1.15% in 2013.
Favorable Return on Equity (ROE): BancFirst’s ROE of 13.04% compares favorably with the industry average of 9.51%, implying that it is efficient in using its shareholders’ funds.
Strong Leverage:BancFirst has a debt/equity ratio of 0.04 compared with the industry’s average of 0.56. This leverage status should help the company perform better than its peers in a volatile business environment.
First Financial has witnessed upward earnings estimate revision of 2.8% for the current year in the last 60 days. Also, its shares have gained 50.4% in the past 12 months.
First Community’s current-year earnings estimates have been revised 2.7% upward over the last 60 days. Further, its shares have rallied 21.7% in a year.
The Zacks Consensus Estimate for Franklin Financial has been revised nearly 1% upward for the current year over the last 60 days. Its share price has witnessed a 18.1% increase over the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
6 Reasons That Make BancFirst an Investment-Worthy Stock
A favorable operating backdrop with rising interest rates, lower commercial tax rate and ease in regulations should continue to support banking stocks. With this in mind, we have chosen BancFirst Corporation (BANF - Free Report) for your consideration.
The company benefits from its strong balance sheet position and robust organic growth. Also, its earnings growth prospects keep us encouraged.
Also, BancFirst has a decent earnings surprise history. It surpassed the Zacks Consensus Estimate in two of the trailing four quarters with an average beat of 3.3%.
Further, it has been successful in gaining analysts’ confidence. Its current-year earnings estimates have revised 3.1% upward, over the last 60 days. As a result, the stock carries a Zacks Rank #2 (Buy).
Shares of BancFirst have gained 26.8% so far this year, significantly outperforming the industry’s growth of 1.6%.
Here’s What Might Drive the Stock Higher
Earnings Strength: While BancFirst’s historical earnings per share (EPS) growth rate of 11.8% compares favorably with the industry average of 8.8%, investors should really focus on projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 35.3%, higher than the industry average of 24.1%.
Further, the long-term (three-five years) expected EPS growth rate of 10% promises rewards for shareholders.
Revenue Growth: Organic growth remains strong at BancFirst. Revenues witnessed a compound annual growth rate (CAGR) of 8% over the last five years (ended 2017). Also, the company’s net interest margin has expanded 40 basis points in the same time period, supporting the company’s interest income. The uptrend in revenues continued in the first six months of 2018. Further, the top line is expected to increase 10.7% in the year compared with no growth for the industry.
Impressive Balance Sheet Growth: The company’s loans and deposits have witnessed a CAGR of 8.7% and 4.3%, respectively, over a five-year period (ended 2017). Thus, a strong balance sheet position enables BancFirst to undertake any opportunistic expansion moves.
Improving Credit Quality: BancFirst’s credit quality has improved significantly over the years. In 2017, the ratio of nonperforming and restructured loans to total loans declined to 0.84% from 0.98% in 2013. Also, the ratio of allowance for loan losses to total loans came in at 1.09% compared with 1.15% in 2013.
Favorable Return on Equity (ROE): BancFirst’s ROE of 13.04% compares favorably with the industry average of 9.51%, implying that it is efficient in using its shareholders’ funds.
Strong Leverage:BancFirst has a debt/equity ratio of 0.04 compared with the industry’s average of 0.56. This leverage status should help the company perform better than its peers in a volatile business environment.
Other Stocks to Consider
Some other top-ranked stocks from the finance space are First Financial Bankshares, Inc. (FFIN - Free Report) , First Community Corporation (FCCO - Free Report) and Franklin Financial Network, Inc. , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
First Financial has witnessed upward earnings estimate revision of 2.8% for the current year in the last 60 days. Also, its shares have gained 50.4% in the past 12 months.
First Community’s current-year earnings estimates have been revised 2.7% upward over the last 60 days. Further, its shares have rallied 21.7% in a year.
The Zacks Consensus Estimate for Franklin Financial has been revised nearly 1% upward for the current year over the last 60 days. Its share price has witnessed a 18.1% increase over the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>