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Here's Why You Should Buy Raymond James (RJF) Stock Right Now
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Raymond James (RJF - Free Report) is well positioned for organic and inorganic expansion on the back of solid balance sheet and capital position. The company’s steady capital deployment actions will enhance shareholder value.
Analysts are optimistic about its growth potential. The Zacks Consensus Estimate for earnings has moved 6.6% and 5.3% upward for fiscal 2021 and fiscal 2022, respectively, over the past 30 days. The stock currently carries a Zacks Rank #2 (Buy).
So far this year, shares of Raymond James have rallied 41.6%, outperforming the industry’s 38.1% rise.
Image Source: Zacks Investment Research
Factors That Make Raymond James Stock a Solid Pick
Earnings Growth: Over the past three to five years, Raymond James has recorded earnings growth of 13.6%. The same momentum is expected to continue in the near term, with the company’s earnings for fiscal 2021 likely to grow at the rate of 64.5%.
Also, the stock has a Growth Score of B. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Revenue Strength: Raymond James remains focused on enhancing revenue growth. The company’s revenues witnessed a CAGR of 10.3% in the last five years (2016-2020). Its strategy to grow inorganically is paying off well. The company’s sales are expected to grow 19.8% for fiscal 2021 and 7.9% for fiscal 2022.
Strong Balance Sheet: As of Jun 30, 2021, Raymond James had a total debt of $2.9 billion, and cash and cash equivalents worth $6 billion. With no near-term debt maturities and solid earnings strength, there is a less likelihood that the company will default on its debt obligations, even if the economic situation worsens.
Synergies From Opportunistic Buyouts: Raymond James has undertaken several strategic expansion plans over the past few years, driven by strong liquidity and balance sheet position. In May, it announced a deal to acquire Cebile Capital, while in March, it acquired a boutique investment bank, Financo. In 2020, it acquired NWPS Holdings, Inc, and in 2019, it acquired Silver Line Advisors and 100% stake in ClariVest Asset Management. The company has expanded into Europe and Canada with the help of opportunistic acquisitions. These deals position Raymond James well for future growth.
Steady Capital Deployments: Raymond James has a track record of regularly raising dividends over the last decade. The last dividend hike of 5.4% was announced in December 2020. While in mid-March 2020 the company suspended share buybacks to conserve liquidity, it resumed the same in fourth-quarter fiscal 2020. As of Jul 28, 2021, $632 million remained available under the buyback authorization. Given its robust capital position and lower dividend payout ratio than peers, the company is expected to sustain capital deployment activities.
Stock Seems Undervalued: Raymond James has a Value Score of A. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Also, the company’s price/book and price/sales ratio are lower than their respective industry averages.
Other Stocks to Consider
Evercore Inc.’s (EVR - Free Report) earnings estimates for the current year have moved up 10.2% over the past 30 days. The company’s shares have gained 21.7% year to date. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tradeweb Markets Inc.’s (TW - Free Report) earnings estimates for the current year have moved 2.5% upward over the past month. The stock has rallied 42.2% so far this year. The company currently sports a Zacks Rank #1.
Moelis & Company’s (MC - Free Report) earnings estimates for 2020 have increased 16.5% over the past 30 days. So far this year, the company’s shares have gained 28.3%. At present, it has a Zacks Rank #2.
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Here's Why You Should Buy Raymond James (RJF) Stock Right Now
Raymond James (RJF - Free Report) is well positioned for organic and inorganic expansion on the back of solid balance sheet and capital position. The company’s steady capital deployment actions will enhance shareholder value.
Analysts are optimistic about its growth potential. The Zacks Consensus Estimate for earnings has moved 6.6% and 5.3% upward for fiscal 2021 and fiscal 2022, respectively, over the past 30 days. The stock currently carries a Zacks Rank #2 (Buy).
So far this year, shares of Raymond James have rallied 41.6%, outperforming the industry’s 38.1% rise.
Image Source: Zacks Investment Research
Factors That Make Raymond James Stock a Solid Pick
Earnings Growth: Over the past three to five years, Raymond James has recorded earnings growth of 13.6%. The same momentum is expected to continue in the near term, with the company’s earnings for fiscal 2021 likely to grow at the rate of 64.5%.
Also, the stock has a Growth Score of B. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Revenue Strength: Raymond James remains focused on enhancing revenue growth. The company’s revenues witnessed a CAGR of 10.3% in the last five years (2016-2020). Its strategy to grow inorganically is paying off well. The company’s sales are expected to grow 19.8% for fiscal 2021 and 7.9% for fiscal 2022.
Strong Balance Sheet: As of Jun 30, 2021, Raymond James had a total debt of $2.9 billion, and cash and cash equivalents worth $6 billion. With no near-term debt maturities and solid earnings strength, there is a less likelihood that the company will default on its debt obligations, even if the economic situation worsens.
Synergies From Opportunistic Buyouts: Raymond James has undertaken several strategic expansion plans over the past few years, driven by strong liquidity and balance sheet position. In May, it announced a deal to acquire Cebile Capital, while in March, it acquired a boutique investment bank, Financo. In 2020, it acquired NWPS Holdings, Inc, and in 2019, it acquired Silver Line Advisors and 100% stake in ClariVest Asset Management. The company has expanded into Europe and Canada with the help of opportunistic acquisitions. These deals position Raymond James well for future growth.
Steady Capital Deployments: Raymond James has a track record of regularly raising dividends over the last decade. The last dividend hike of 5.4% was announced in December 2020. While in mid-March 2020 the company suspended share buybacks to conserve liquidity, it resumed the same in fourth-quarter fiscal 2020. As of Jul 28, 2021, $632 million remained available under the buyback authorization. Given its robust capital position and lower dividend payout ratio than peers, the company is expected to sustain capital deployment activities.
Stock Seems Undervalued: Raymond James has a Value Score of A. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Also, the company’s price/book and price/sales ratio are lower than their respective industry averages.
Other Stocks to Consider
Evercore Inc.’s (EVR - Free Report) earnings estimates for the current year have moved up 10.2% over the past 30 days. The company’s shares have gained 21.7% year to date. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tradeweb Markets Inc.’s (TW - Free Report) earnings estimates for the current year have moved 2.5% upward over the past month. The stock has rallied 42.2% so far this year. The company currently sports a Zacks Rank #1.
Moelis & Company’s (MC - Free Report) earnings estimates for 2020 have increased 16.5% over the past 30 days. So far this year, the company’s shares have gained 28.3%. At present, it has a Zacks Rank #2.