We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Loans, Solid Balance Sheet Aid Zions (ZION) Despite Low Rates
Read MoreHide Full Article
Zions Bancorporation’s (ZION - Free Report) solid loan and deposit balance, and business simplification efforts are expected to keep supporting its financials. Also, the bank’s capital-deployment activities are impressive and will enhance shareholder value. However, low interest rates and mounting expenses remain major near-term woes.
Zions Bancorporation’s organic growth looks impressive. The company’s revenues have witnessed a compound annual growth rate (CAGR) of 4% over the last five years (2016-2020), largely driven by continued growth in loans. The bank's non-interest-bearing deposits also continue to boost its financials. Given the company's initiatives to efficiently deploy the capital generated from these deposits, along with a decent rise in loan demand, its top line is likely to improve further.
The company’s capital deployment is also commendable. While the bank is anticipated to continue paying quarterly dividends at the same rate of 34 cents per share, it announced a share-repurchase plan for first-quarter 2021 to buy back up to $50 million shares. Given Zions Bancorporation’s strong balance sheet and lower dividend payout ratio, its capital-deployment activities seem sustainable.
Notably, analysts seem to have an optimistic stance for the stock. The Zacks Consensus Estimate for both 2021 and 2022 earnings has moved 0.7% upward over the past 30 days.
However, given the near-zero interest rates, pressure on net interest margin (NIM) is a major concern for Zions Bancorporation. The company saw a fall in NIM in 2020 to 3.15% from 3.54% in 2019 and 3.61% in 2018. As the Federal Reserve has signaled no change in interest rates anytime soon, the NIM might remain under pressure despite the rise in loan demand.
Also, the company’s mounting expenses on account of investments in franchise and technology upgrades is a major concern. The total non-interest expenses witnessed a CAGR of 1.8% over the last five years (ended 2020).
Shares of this Zacks Rank #3 (Hold) company have rallied 73.2% over the past six months, underperforming the industry’s growth of 77.5%.
Stocks to Consider
Virtu Financial, Inc. (VIRT - Free Report) has been witnessing upward estimate revisions of 27% for the past 30 days for current-year earnings. Its shares have declined 2.8% over the past six months. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Community Trust Bancorp, Inc. (CTBI - Free Report) recorded an upward earnings estimate revision of 4.5% for 2021 over the past 30 days. Its shares have gained 41.5% in six months’ time. Currently, it flaunts a Zacks Rank of 1.
First Financial Bancorp. (FFBC - Free Report) has witnessed an upward earnings estimate revision of 3% for the ongoing year in 30 days’ time. Its shares have surged 81.7% in the past six months. At present, it sports a Zacks Rank of 1.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Shutterstock
Loans, Solid Balance Sheet Aid Zions (ZION) Despite Low Rates
Zions Bancorporation’s (ZION - Free Report) solid loan and deposit balance, and business simplification efforts are expected to keep supporting its financials. Also, the bank’s capital-deployment activities are impressive and will enhance shareholder value. However, low interest rates and mounting expenses remain major near-term woes.
Zions Bancorporation’s organic growth looks impressive. The company’s revenues have witnessed a compound annual growth rate (CAGR) of 4% over the last five years (2016-2020), largely driven by continued growth in loans. The bank's non-interest-bearing deposits also continue to boost its financials. Given the company's initiatives to efficiently deploy the capital generated from these deposits, along with a decent rise in loan demand, its top line is likely to improve further.
The company’s capital deployment is also commendable. While the bank is anticipated to continue paying quarterly dividends at the same rate of 34 cents per share, it announced a share-repurchase plan for first-quarter 2021 to buy back up to $50 million shares. Given Zions Bancorporation’s strong balance sheet and lower dividend payout ratio, its capital-deployment activities seem sustainable.
Notably, analysts seem to have an optimistic stance for the stock. The Zacks Consensus Estimate for both 2021 and 2022 earnings has moved 0.7% upward over the past 30 days.
However, given the near-zero interest rates, pressure on net interest margin (NIM) is a major concern for Zions Bancorporation. The company saw a fall in NIM in 2020 to 3.15% from 3.54% in 2019 and 3.61% in 2018. As the Federal Reserve has signaled no change in interest rates anytime soon, the NIM might remain under pressure despite the rise in loan demand.
Also, the company’s mounting expenses on account of investments in franchise and technology upgrades is a major concern. The total non-interest expenses witnessed a CAGR of 1.8% over the last five years (ended 2020).
Shares of this Zacks Rank #3 (Hold) company have rallied 73.2% over the past six months, underperforming the industry’s growth of 77.5%.
Stocks to Consider
Virtu Financial, Inc. (VIRT - Free Report) has been witnessing upward estimate revisions of 27% for the past 30 days for current-year earnings. Its shares have declined 2.8% over the past six months. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Community Trust Bancorp, Inc. (CTBI - Free Report) recorded an upward earnings estimate revision of 4.5% for 2021 over the past 30 days. Its shares have gained 41.5% in six months’ time. Currently, it flaunts a Zacks Rank of 1.
First Financial Bancorp. (FFBC - Free Report) has witnessed an upward earnings estimate revision of 3% for the ongoing year in 30 days’ time. Its shares have surged 81.7% in the past six months. At present, it sports a Zacks Rank of 1.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>