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5 Reasons to Invest in Preferred Bank (PFBC) Stock Right Now
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It seems to be a wise idea to add Preferred Bank (PFBC - Free Report) stock to your portfolio now. Supported by higher rates and loan growth, the company remains on track for solid top-line improvement. Also, it is committed to driving operating efficiency through several initiatives.
Analysts seem optimistic regarding the company’s earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for PFBC’s current-year earnings has been revised nearly 1% upward. As a result, Preferred Bank currently carries a Zacks Rank #2 (Buy).
Over the past six months, shares of Preferred Bank have lost 15.3% compared with the industry’s decline of 47.9%.
Image Source: Zacks Investment Research
Given its robust fundamentals and solid growth prospects, the company’s price performance is expected to improve in the near term.
Mentioned below are some other factors that make PFBC stock an attractive investment option now.
Earnings Strength: Preferred Bank has recorded earnings growth of 14.1% over the past three to five years, higher than the industry’s 9.5% rise. The upward momentum is expected to continue in the near term. In 2023, the company’s earnings are projected to grow 14.9%.
PFBC has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 6.7%.
Revenue Growth: Supported by the rise in loan balances, Preferred Bank’s revenues have witnessed a compound annual growth rate (CAGR) of 12% over the last five years (2018-2022). The trend is expected to continue in the near term, as reflected by the company’s projected sales growth rate of 18.1% for 2023.
Superior Return on Equity (ROE): Preferred Bank’s ROE is 21.4%, higher than the industry average of 13.6%. This reflects its superiority in terms of utilizing shareholder funds compared with peers.
Strong Leverage: Preferred Bank’s debt/equity ratio is 0.23 compared with the industry average of 0.35. This indicates that PFBC has a relatively lower debt burden compared with peers. Thus, the company will be more financially stable in adverse economic conditions.
Favorable Valuation: Preferred Bank stock looks undervalued compared with the broader industry. It currently has a price-to-cash flow ratio of 6.12, lower than the industry average of 6.51. Also, its price-to-earnings (F1) ratio of 5.51 is below the industry’s 7.13.
PFBC has a Value Score of A. The Value Style Score condenses all valuation metrics into one actionable score, which helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.
Earnings estimates for BK have been revised 2.5% upward for 2023 over the past 60 days. BNY Mellon’s share price has rallied 14% over the past six months.
Southside Bancshares’ earnings estimates have been revised upward by 1.5% for the current year over the past 60 days. In six months’ time, SBSI’s share price has declined 4.7%.
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5 Reasons to Invest in Preferred Bank (PFBC) Stock Right Now
It seems to be a wise idea to add Preferred Bank (PFBC - Free Report) stock to your portfolio now. Supported by higher rates and loan growth, the company remains on track for solid top-line improvement. Also, it is committed to driving operating efficiency through several initiatives.
Analysts seem optimistic regarding the company’s earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for PFBC’s current-year earnings has been revised nearly 1% upward. As a result, Preferred Bank currently carries a Zacks Rank #2 (Buy).
Over the past six months, shares of Preferred Bank have lost 15.3% compared with the industry’s decline of 47.9%.
Image Source: Zacks Investment Research
Given its robust fundamentals and solid growth prospects, the company’s price performance is expected to improve in the near term.
Mentioned below are some other factors that make PFBC stock an attractive investment option now.
Earnings Strength: Preferred Bank has recorded earnings growth of 14.1% over the past three to five years, higher than the industry’s 9.5% rise. The upward momentum is expected to continue in the near term. In 2023, the company’s earnings are projected to grow 14.9%.
PFBC has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 6.7%.
Revenue Growth: Supported by the rise in loan balances, Preferred Bank’s revenues have witnessed a compound annual growth rate (CAGR) of 12% over the last five years (2018-2022). The trend is expected to continue in the near term, as reflected by the company’s projected sales growth rate of 18.1% for 2023.
Superior Return on Equity (ROE): Preferred Bank’s ROE is 21.4%, higher than the industry average of 13.6%. This reflects its superiority in terms of utilizing shareholder funds compared with peers.
Strong Leverage: Preferred Bank’s debt/equity ratio is 0.23 compared with the industry average of 0.35. This indicates that PFBC has a relatively lower debt burden compared with peers. Thus, the company will be more financially stable in adverse economic conditions.
Favorable Valuation: Preferred Bank stock looks undervalued compared with the broader industry. It currently has a price-to-cash flow ratio of 6.12, lower than the industry average of 6.51. Also, its price-to-earnings (F1) ratio of 5.51 is below the industry’s 7.13.
PFBC has a Value Score of A. The Value Style Score condenses all valuation metrics into one actionable score, which helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.
Other Stocks to Consider
A couple of other top-ranked finance stocks are The Bank of New York Mellon Corporation (BK - Free Report) and Southside Bancshares (SBSI - Free Report) . Both companies currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for BK have been revised 2.5% upward for 2023 over the past 60 days. BNY Mellon’s share price has rallied 14% over the past six months.
Southside Bancshares’ earnings estimates have been revised upward by 1.5% for the current year over the past 60 days. In six months’ time, SBSI’s share price has declined 4.7%.