The Banking industry has been benefitting amid a stabilizing economy as well as higher interest rates. Further, the sector reported impressive performance in second-quarter 2018.
Texas Capital Bancshares, Inc. (TCBI - Free Report) is one such stock which reported a year-over-year increase in its second quarter earnings. It remains well poised to grow, driven by continued top-line growth, improving earnings performance, along with a strong balance-sheet position. Also, the company has an impressive capital-deployment plan.
A bullish trend in estimate revisions reflects optimism over the company’s earnings growth prospects. Over the last 60 days, the Zacks Consensus Estimate for 2018 and 2019 moved up 0.7% and 2.5%, respectively. As a result, the stock currently carries a Zacks Rank #2 (Buy).
Also, its shares have gained 22.9% over the past year, outperforming the industry’s rally of 15.7%.
What Makes the Stock a Solid Pick
Earnings Growth: Over the past three to five years, Texas Capital witnessed earnings per share growth of 11.3% compared with 8.8% increase for the industry. Notably, the company’s earnings are expected to display an upswing in the near term as its projected EPS growth is 50.1% for 2018 and 15.4% for 2019.
Further, the long-term expected EPS growth rate of 11.3% promises rewards for its shareholders.
Revenue Growth: Organic growth remains a key strength for Texas Capital. Net revenues witnessed a compound annual growth rate of 17.2%, over the last four years (2014-2017), with the trend continuing during the first six months of 2018 as well.
The company’s projected sales growth of 19.3% for 2018 and 11.5% for 2019 indicates constant upward momentum in revenues.
Favorable Return on Equity (ROE): Texas Capital’s ROE of 12.51% indicates its superiority in terms of utilizing shareholders’ funds. The figure also compares favorably with the industry’s ROE of 9.51%.Stock seems undervalued:
Texas Capital seems undervalued when compared with the broader industry. The current price-earnings (F1) ratio of 14.36 and PEG ratio of 1.27 are lower than the respective industry averages.
Other Key Picks
Some other similarly-ranked stocks in the same space are BancFirst Corp. (BANF - Free Report) , First Financial Bankshares (FFIN - Free Report) and BOK Financial Corp. (BOKF - Free Report) . All these stocks carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the last 60 days, the Zacks Consensus Estimate for BancFirst Corp’s current-year earnings has been revised 3.1% upward. Its share price has gained 26.7% in the past year.
First Financial Bankshares’ earnings estimates for 2018 have been revised 2.8% upward over the past 60 days. Its shares have surged 50.5% in a year’s time.
Over the last 60 days, BOK Financial Corp’s 2018 earnings estimate moved 2.2% north. Over the past year, its share price has appreciated 26.5%.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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The Banking industry has been benefitting amid a stabilizing economy as well as higher interest rates. Further, the sector reported impressive performance in second-quarter 2018.
Texas Capital Bancshares, Inc. (TCBI - Free Report) is one such stock which reported a year-over-year increase in its second quarter earnings. It remains well poised to grow, driven by continued top-line growth, improving earnings performance, along with a strong balance-sheet position. Also, the company has an impressive capital-deployment plan.
A bullish trend in estimate revisions reflects optimism over the company’s earnings growth prospects. Over the last 60 days, the Zacks Consensus Estimate for 2018 and 2019 moved up 0.7% and 2.5%, respectively. As a result, the stock currently carries a Zacks Rank #2 (Buy).
Also, its shares have gained 22.9% over the past year, outperforming the industry’s rally of 15.7%.
What Makes the Stock a Solid Pick
Earnings Growth: Over the past three to five years, Texas Capital witnessed earnings per share growth of 11.3% compared with 8.8% increase for the industry. Notably, the company’s earnings are expected to display an upswing in the near term as its projected EPS growth is 50.1% for 2018 and 15.4% for 2019.
Further, the long-term expected EPS growth rate of 11.3% promises rewards for its shareholders.
Revenue Growth: Organic growth remains a key strength for Texas Capital. Net revenues witnessed a compound annual growth rate of 17.2%, over the last four years (2014-2017), with the trend continuing during the first six months of 2018 as well.
The company’s projected sales growth of 19.3% for 2018 and 11.5% for 2019 indicates constant upward momentum in revenues.
Favorable Return on Equity (ROE): Texas Capital’s ROE of 12.51% indicates its superiority in terms of utilizing shareholders’ funds. The figure also compares favorably with the industry’s ROE of 9.51%.
Stock seems undervalued:
Texas Capital seems undervalued when compared with the broader industry. The current price-earnings (F1) ratio of 14.36 and PEG ratio of 1.27 are lower than the respective industry averages.Other Key Picks
Some other similarly-ranked stocks in the same space are BancFirst Corp. (BANF - Free Report) , First Financial Bankshares (FFIN - Free Report) and BOK Financial Corp. (BOKF - Free Report) . All these stocks carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the last 60 days, the Zacks Consensus Estimate for BancFirst Corp’s current-year earnings has been revised 3.1% upward. Its share price has gained 26.7% in the past year.
First Financial Bankshares’ earnings estimates for 2018 have been revised 2.8% upward over the past 60 days. Its shares have surged 50.5% in a year’s time.
Over the last 60 days, BOK Financial Corp’s 2018 earnings estimate moved 2.2% north. Over the past year, its share price has appreciated 26.5%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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