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4 Reasons to Add Guaranty Bancshares (GNTY) to Your Portfolio
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The Federal Reserve’s decision to raise interest rates this year to tackle the red-hot inflation will be beneficial for banks. Given the rate hikes in March, May and mid-June, along with expectations of more this year, banks are expected to witness solid improvement in the top line and margins. Thus, investing in banks seems to be a good decision right now. One such bank is Guaranty Bancshares, Inc. (GNTY - Free Report) , which looks like an attractive pick right now, given its solid fundamentals and good growth prospects.
The company has also been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Guaranty Bancshares’ 2022 earnings has been revised 10% upward. Thus, the company currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have gained 2.5% over the past year compared with the industry’s rise of 1.3%.
Image Source: Zacks Investment Research
Mentioned below are some other factors that make Guaranty Bancshares stock an attractive investment option now.
Earnings per Share (EPS) Growth: The company witnessed EPS growth of 27% in the last three to five years, higher than the industry average of 12.1%. The upward trend is expected to continue in the near term. GNTY’s earnings are projected to grow 2.8% in 2022 and 3.4% in 2023.
It also has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 9%.
Revenue Strength: Guaranty Bancshares’ revenues witnessed a compound annual growth rate of 10.2% over the last six years (2016-2021). The uptrend in revenues is expected to continue in the near term, as reflected by the company’s projected sales growth rate of 5.6% for the current year and 8.4% for 2023.
Superior Return on Equity (ROE): Guaranty Bancshares’ ROE is 13.63% compared with the industry average of 12.00%. This indicates that it reinvests its cash more efficiently than the industry.
Favorable Valuation: The company seems to be trading at a discount with respect to its price/cash flow (P/CF) and price/earnings (P/E) ratios. Currently, it has a P/CF ratio of 8.90, which is below the industry average of 9.46. Also, its P/E (F1) ratio of 10.96 compares with the industry average of 11.68.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 13.7% upward over the past 60 days. Over the past year, STBA’s share price has declined 11.6%.
Arrow Financial’s current-year earnings estimates have been revised 3.2% upward over the past 60 days. AROW’s shares have lost 9.4% over the past year.
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4 Reasons to Add Guaranty Bancshares (GNTY) to Your Portfolio
The Federal Reserve’s decision to raise interest rates this year to tackle the red-hot inflation will be beneficial for banks. Given the rate hikes in March, May and mid-June, along with expectations of more this year, banks are expected to witness solid improvement in the top line and margins. Thus, investing in banks seems to be a good decision right now. One such bank is Guaranty Bancshares, Inc. (GNTY - Free Report) , which looks like an attractive pick right now, given its solid fundamentals and good growth prospects.
The company has also been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Guaranty Bancshares’ 2022 earnings has been revised 10% upward. Thus, the company currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have gained 2.5% over the past year compared with the industry’s rise of 1.3%.
Image Source: Zacks Investment Research
Mentioned below are some other factors that make Guaranty Bancshares stock an attractive investment option now.
Earnings per Share (EPS) Growth: The company witnessed EPS growth of 27% in the last three to five years, higher than the industry average of 12.1%. The upward trend is expected to continue in the near term. GNTY’s earnings are projected to grow 2.8% in 2022 and 3.4% in 2023.
It also has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 9%.
Revenue Strength: Guaranty Bancshares’ revenues witnessed a compound annual growth rate of 10.2% over the last six years (2016-2021). The uptrend in revenues is expected to continue in the near term, as reflected by the company’s projected sales growth rate of 5.6% for the current year and 8.4% for 2023.
Superior Return on Equity (ROE): Guaranty Bancshares’ ROE is 13.63% compared with the industry average of 12.00%. This indicates that it reinvests its cash more efficiently than the industry.
Favorable Valuation: The company seems to be trading at a discount with respect to its price/cash flow (P/CF) and price/earnings (P/E) ratios. Currently, it has a P/CF ratio of 8.90, which is below the industry average of 9.46. Also, its P/E (F1) ratio of 10.96 compares with the industry average of 11.68.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the finance space are S&T Bancorp, Inc. (STBA - Free Report) and Arrow Financial Corporation (AROW - Free Report) . STBA and AROW currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 13.7% upward over the past 60 days. Over the past year, STBA’s share price has declined 11.6%.
Arrow Financial’s current-year earnings estimates have been revised 3.2% upward over the past 60 days. AROW’s shares have lost 9.4% over the past year.