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Here's Why Independent Bank (INDB) Stock is Worth Buying Now
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Independent Bank Corp. (INDB - Free Report) stock looks like a good investment option right now. The company remains on track for organic growth, supported by the rise in loans and deposit balances. Its efficient capital deployments and strategic acquisitions indicate solid balance sheet and liquidity positions.
Analysts seem to be optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for earnings for 2022 and 2023 has been revised 4.1% and 2.1% upward, respectively, over the past 30 days. Independent Bank currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 0.3% over the past month against 5.9% decline recorded by the industry.
Image Source: Zacks Investment Research
Here are some of the other factors that make INDB an attractive pick right now:
Earnings Growth: Independent Bank witnessed earnings growth of 8.3% in the past three to five years. While the company’s earnings are projected to decline 9.3% for 2022, the same are expected to witness growth of 8.7% for 2023.
Also, the company’s earnings were impressive and beat the Zacks Consensus Estimate in all of the four trailing four quarters, with an average beat of 24.29%.
Revenue Strength: The company’s organic growth trajectory looks impressive. Revenues witnessed a compound annual growth rate (“CAGR”) of 10.4% over the past five years (2017-2021). Over the same period, total loans witnessed a CAGR of 20.9%, while deposits witnessed a CAGR of 25.9%. Continued increases in loans and deposits, along with solid economic growth are expected to further support the top line.
INDB’s 2022 revenues are projected to grow 31.6%, whereas 2023 revenues will likely grow 6.5%.
Efficient Capital Deployments: Independent Bank’s capital deployment activities seem impressive. The company has been regularly hiking dividends. In 2021, the company hiked its quarterly dividend by 5%. This followed a 5% raise in 2020, 16% in 2019 and 19% in 2018.
Also, the company announced a share-repurchase program under which it is authorized to repurchase up to $140-million worth shares until Jan 18, 2023. INDB’s capital deployment plan looks sustainable, given its solid capital position and earnings strength.
Opportunistic Acquisitions: Given its solid balance sheet position, Independent Bank is well-positioned to grow on the back of strategic acquisitions. In 2021, the company acquired Meridian Bancorp, Inc. and its subsidiary, East Boston Savings Bank. In 2019 and 2018, it acquired Blue Hills Bancorp, Inc. and MNB Bancorp, respectively. These deals are expected to be accretive to the company’s earnings and support financials.
Strong Leverage: The company currently has a debt/equity ratio of 0.05 compared with the industry average of 0.22. This highlights that INDB is better positioned than its peers. The company will be financially stable even in adverse economic conditions.
Image: Shutterstock
Here's Why Independent Bank (INDB) Stock is Worth Buying Now
Independent Bank Corp. (INDB - Free Report) stock looks like a good investment option right now. The company remains on track for organic growth, supported by the rise in loans and deposit balances. Its efficient capital deployments and strategic acquisitions indicate solid balance sheet and liquidity positions.
Analysts seem to be optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for earnings for 2022 and 2023 has been revised 4.1% and 2.1% upward, respectively, over the past 30 days. Independent Bank currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 0.3% over the past month against 5.9% decline recorded by the industry.
Image Source: Zacks Investment Research
Here are some of the other factors that make INDB an attractive pick right now:
Earnings Growth: Independent Bank witnessed earnings growth of 8.3% in the past three to five years. While the company’s earnings are projected to decline 9.3% for 2022, the same are expected to witness growth of 8.7% for 2023.
Also, the company’s earnings were impressive and beat the Zacks Consensus Estimate in all of the four trailing four quarters, with an average beat of 24.29%.
Revenue Strength: The company’s organic growth trajectory looks impressive. Revenues witnessed a compound annual growth rate (“CAGR”) of 10.4% over the past five years (2017-2021). Over the same period, total loans witnessed a CAGR of 20.9%, while deposits witnessed a CAGR of 25.9%. Continued increases in loans and deposits, along with solid economic growth are expected to further support the top line.
INDB’s 2022 revenues are projected to grow 31.6%, whereas 2023 revenues will likely grow 6.5%.
Efficient Capital Deployments: Independent Bank’s capital deployment activities seem impressive. The company has been regularly hiking dividends. In 2021, the company hiked its quarterly dividend by 5%. This followed a 5% raise in 2020, 16% in 2019 and 19% in 2018.
Also, the company announced a share-repurchase program under which it is authorized to repurchase up to $140-million worth shares until Jan 18, 2023. INDB’s capital deployment plan looks sustainable, given its solid capital position and earnings strength.
Opportunistic Acquisitions: Given its solid balance sheet position, Independent Bank is well-positioned to grow on the back of strategic acquisitions. In 2021, the company acquired Meridian Bancorp, Inc. and its subsidiary, East Boston Savings Bank. In 2019 and 2018, it acquired Blue Hills Bancorp, Inc. and MNB Bancorp, respectively. These deals are expected to be accretive to the company’s earnings and support financials.
Strong Leverage: The company currently has a debt/equity ratio of 0.05 compared with the industry average of 0.22. This highlights that INDB is better positioned than its peers. The company will be financially stable even in adverse economic conditions.
Other Stocks Worth Considering
A couple of other stocks from the finance space worth a look are Morgan Stanley (MS - Free Report) and First Business Financial Services (FBIZ - Free Report) . Morgan Stanley carries a Zacks Rank #2 while FBIZ sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Morgan Stanley’s current-year earnings has been revised 4.2% upward over the past 60 days.
MS’s shares have risen 37.1% in the past year.
First Business recorded an upward earnings estimate revision of 9% for 2022 over the past 60 days.
The FBIZ stock has jumped 53.4% in the past year.