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5 Reasons to Add First Financial (FFIN) to Your Portfolio

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It seems to be a wise idea to invest in First Financial Bankshares (FFIN - Free Report) stock right now. The company is well poised for revenue growth, driven by continued improvement in loans and deposits. Moreover, it has a solid balance sheet position.

Further, the company’s current-year earnings estimates have been revised 5% upward over the past 30 days. It currently carries a Zacks Rank #2 (Buy).

Moreover, the stock has been performing well. So far this year, shares of First Financial have rallied 45.7%, outperforming rise of 40.6% for the industry it belongs to.

What Makes First Financial a Solid Pick

Revenue Strength: First Financial has been witnessing consistent improvement in revenues, driven by growth in loans and deposit balances. Over the last five years (ended 2020), total revenues recorded a compound annual growth rate (CAGR) of 12.3%.

Moreover, backed by strong balance sheet and liquidity position, the company is expected to be able to undertake inorganic expansion moves. In 2020, it acquired TB&T Bancshares, Inc., which helped boost its non-interest revenues.

The company’s revenues are projected to grow 2.3% in 2021.

Earnings Growth: First Financial recorded earnings growth of 15.7% over the past three to five years. This momentum is likely to continue in the near term, as reflected by the company’s projected earnings growth rate of 4.2% for 2021.

Moreover, First Financial has a decent earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 18.59%.

Steady Capital Deployments: First Financial undertakes sustainable capital-deployment activities. In March 2020, the company announced a share-buyback plan of up to 4 million shares through September 2021. Also, in April 2021, the bank declared a dividend of 15 cents per share for the second quarter of 2021, which represents a 15.4% increase from previous payout.

Superior Return on Equity (ROE): First Financial has a ROE of 13.55% compared with the industry average of 9.94%. This indicates the company’s superiority in utilizing shareholders’ funds.

Strong Leverage: First Financial’s debt/equity ratio is nil against the industry average of 0.19. The relatively strong financial health of the company is likely to help it perform better than its peers in a dynamic business environment.

Other Stocks Worth Considering

Wells Fargo & Company (WFC - Free Report) has witnessed a 43.1% upward estimate revision over the past 60 days. The company’s shares have rallied 51.5% so far this year. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

KeyCorp’s (KEY - Free Report) shares have gained 39.5% so far this year. Further, the company’s earnings estimates for the ongoing year have moved 16.8% north in the past 60 days. It currently has a Zacks Rank of 2.

UMB Financial Corporation (UMBF - Free Report) has witnessed 26.2% upward estimates revision for the current-year over the past 60 days. Shares of this Zacks #2 Ranked stock have gained 40.9% so far this year.

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