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3 Reasons That Make Guaranty Bancshares (GNTY) Stock a Must Buy
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With the Federal Reserve still signaling a 75-basis point cut in interest rates and robust economic growth in 2024, bank stocks are expected to remain in the spotlight. 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 growth prospects.
Analysts also seem to be optimistic regarding the company’s growth potential. Over the past two months, the Zacks Consensus Estimate for Guaranty Bancshares’ 2024 earnings has been revised 5.3% upward. The stock currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have risen 8% over the past year against the industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Mentioned below are some of the factors that make GNTY stock worth a look.
Earnings Growth: The company witnessed earnings growth of 15.4% in the last three to five years, higher than the industry average of 13%. Though earnings are projected to decline 14.2% this year due to lower revenues, the trend is set to reverse in 2025. Earnings are expected to grow 13.3% in 2025.
It also has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 10.1%.
Revenue Strength: Over the years, GNTY has grown primarily through existing markets and “the entry into new markets with de novo banking locations.” Also, the company has expanded operations through strategic acquisitions, which has helped it gain entry into markets with robust loan demand and maintain stable operating efficiencies.
Guaranty Bancshares’ revenues witnessed a compound annual growth rate of 7.2% over the last five years (2018-2023). While revenues are projected to fall 1.1% in 2024 due to lower net interest income, the trend will reverse next year. The company’s revenues are anticipated to increase 5.8% in 2025.
Capital Distribution: Earlier this month, GNTY announced a new share repurchase program and a 4.3% hike in the quarterly dividend. Under the buyback plan, the board of directors authorized the buyback of 1.25 million shares. The plan will remain in place till Apr 21, 2026, or the repurchase of all the shares authorized.
Further, GNTY announced a quarterly cash dividend of 24 cents per share. The dividend will be paid out on Apr 10 to shareholders on record as of Mar 25. Over the past five years, the company raised its dividend seven times, with annualized dividend growth of 9.8%. At present, Guaranty Bancshares’ payout ratio is 36% of earnings.
Given the earnings strength and solid balance sheet position, its capital distributions are likely to be sustainable going forward.
The Zacks Consensus Estimate for BSVN’s 2024 earnings has been revised 5.8% north over the past 60 days. Over the past three months, shares of Bank7 Corp have risen 11.6%.
The Zacks Consensus Estimate for FCCO’s current-year earnings has been revised 9% upward over the past 60 days. First Community Corp’s shares have declined 15.9% over the past three months.
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3 Reasons That Make Guaranty Bancshares (GNTY) Stock a Must Buy
With the Federal Reserve still signaling a 75-basis point cut in interest rates and robust economic growth in 2024, bank stocks are expected to remain in the spotlight. 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 growth prospects.
Analysts also seem to be optimistic regarding the company’s growth potential. Over the past two months, the Zacks Consensus Estimate for Guaranty Bancshares’ 2024 earnings has been revised 5.3% upward. The stock currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of the company have risen 8% over the past year against the industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Mentioned below are some of the factors that make GNTY stock worth a look.
Earnings Growth: The company witnessed earnings growth of 15.4% in the last three to five years, higher than the industry average of 13%. Though earnings are projected to decline 14.2% this year due to lower revenues, the trend is set to reverse in 2025. Earnings are expected to grow 13.3% in 2025.
It also has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 10.1%.
Revenue Strength: Over the years, GNTY has grown primarily through existing markets and “the entry into new markets with de novo banking locations.” Also, the company has expanded operations through strategic acquisitions, which has helped it gain entry into markets with robust loan demand and maintain stable operating efficiencies.
Guaranty Bancshares’ revenues witnessed a compound annual growth rate of 7.2% over the last five years (2018-2023). While revenues are projected to fall 1.1% in 2024 due to lower net interest income, the trend will reverse next year. The company’s revenues are anticipated to increase 5.8% in 2025.
Capital Distribution: Earlier this month, GNTY announced a new share repurchase program and a 4.3% hike in the quarterly dividend. Under the buyback plan, the board of directors authorized the buyback of 1.25 million shares. The plan will remain in place till Apr 21, 2026, or the repurchase of all the shares authorized.
Further, GNTY announced a quarterly cash dividend of 24 cents per share. The dividend will be paid out on Apr 10 to shareholders on record as of Mar 25. Over the past five years, the company raised its dividend seven times, with annualized dividend growth of 9.8%. At present, Guaranty Bancshares’ payout ratio is 36% of earnings.
Given the earnings strength and solid balance sheet position, its capital distributions are likely to be sustainable going forward.
Other Banks Worth Considering
A couple of other top-ranked stocks from the banking space are Bank7 Corp. (BSVN - Free Report) and First Community, Corp. (FCCO - Free Report) . At present, BSVN sports a Zacks Rank #1, and FCCO has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BSVN’s 2024 earnings has been revised 5.8% north over the past 60 days. Over the past three months, shares of Bank7 Corp have risen 11.6%.
The Zacks Consensus Estimate for FCCO’s current-year earnings has been revised 9% upward over the past 60 days. First Community Corp’s shares have declined 15.9% over the past three months.