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5 Reasons That Make South State (SSB) Stock Investment Worthy

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South State Corporation (SSB - Free Report) appears to be a solid bet now, driven by strong fundamentals and promising prospects. Moreover, the company's strong balance sheet position keeps it well poised for growth.

Further, analysts seem to be optimistic about the company as the stock is witnessing upward estimate revisions. The Zacks Consensus Estimate for earnings has moved 3.4% and 1% upward, over the past 30 days, for 2021 and 2022, respectively. The company currently carries a Zacks Rank #2 (Buy).

The stock has rallied 19.4% in the past six months compared with the industry’s growth of 39.9%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

What Makes South State Stock a Solid Pick

Earnings strength: South State recorded earnings growth rate of 3.5% over the last three to five years. This earnings momentum is likely to continue in the near term as indicated by the company’s projected EPS growth rate of 30.5% for 2021.

Revenue growth: The company continues to make steady progress toward improving its top line. Its revenues recorded a five-year (ended 2020) CAGR of 28.1%. Also, its loan and deposit balance remains strong. This, along with an improving operating backdrop, will keep supporting its financials.

The company’s projected sales growth rate of 26.2% for 2021 indicates continued upward momentum in revenues.

Strong balance sheet position: As of Mar 31, 2021, the company had a debt level of $878.6 billion and debt/capital ratio of 0.9, which declined over the past few quarters. The company's cash and cash equivalents and dues from banks were $392.6 billion on the same date. Furthermore, with an improving times interest earned ratio of 10.4 and earnings strength, South State carries low credit risk, and has a lesser likelihood of default of interest and debt repayments, if the economic situation worsens.

Strong Leverage: The company’s debt/equity ratio is valued at 0.1 compared with the industry average of 0.16, indicating a relatively lower debt burden. It highlights the financial stability of the company even in adverse economic conditions.

Favorable VGM Score: The company has a VGM Score of B. VGM Scorehelps to identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a style score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.

Other Stocks to Consider

Hilltop Holdings Inc. (HTH - Free Report) has witnessed a 25.1% upward estimate revision over the past 60 days. The company’s shares have rallied 40% so far this year. It carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hancock Whitney Corporation’s (HWC - Free Report) shares have gained 44.8% so far this year. Further, the company’s earnings estimates for the ongoing year have moved 23.5% 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 39.7% so far this year.

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