Since the U.S. Presidential election results, banking stocks have been on a rally. Growing optimism over an improving rate scenario and strengthening of the domestic economy added fuel to fire.

If you are thinking of investing in banking stocks, this is the right time. From the vast universe of the banking stocks, today we have chosen – Associated Banc-Corp (ASB Quick QuoteASB - Free Report) – for you to consider. Based in Wisconsin, the company offers a profitable investment opportunity driven by steady earnings growth.

Associated Banc-Corp’s shares have increased 26.4% since the election results, underperforming 31.4% gain for the Zacks categorized Midwest Banks industry. Despite this dismal price performance, this Zacks Rank #2 (Buy) stock has plenty of upside left based on its growth prospects and earnings estimate revisions.



The Zacks Consensus Estimate for the current year increased 2.2% over the last 60 days to $1.39. Estimates for 2018 rose 3.3% to $1.57 per share over the same time frame.

Why the Stock is a Solid Pick?

Solid Revenue Growth: Associated Banc-Corp remains focused on its organic growth strategy, depicted by the consistent growth in loan and deposit balances. Also, the company is moving toward digitalization and expects to launch its new mobile app later this year.

Further, the company’s projected sales growth (F1/F0) of 3.7% ensures continuation of the upward trend in revenues.

Earnings Per Share Strength: Over the past three to five years, Associated Banc-Corp witnessed earnings per share (EPS) growth of 12.7% compared with 8.8% for the industry. Notably, the company has a strong earnings surprise history, having delivered positive surprises in three of the trailing four quarters with an average beat of 3.1%.  

Further, the company’s earnings are projected to grow 10.2% in 2017, significantly higher than 7.9% predicted for the industry. Also, the company’s long-term (three to five years) estimated EPS growth rate of 7% promises rewards for investors in the long run.

Solid Dividend Yield: Associated Banc-Corp’s capital-deployment activities remain impressive. The company has been steadily increasing its quarterly dividend. Its current dividend yield of 2.04% is higher than the industry average of 1.72%.

Valuation Looks Reasonable: Associated Banc-Corp has a Value Score of ‘B.’ The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B,’ when combined with Zacks Rank #1 (Strong Buy) or #2, offer the best upside potential.

Other Stocks Worth Considering

Some other stocks worth considering in the same industry include Independent Bank, PrivateBancorp and MainSource Financial. All these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Independent Bank Corporation (IBCP Quick QuoteIBCP - Free Report) witnessed an upward earnings estimate revision of 4.4% for 2017, over the past 60 days. Also, its share price has increased 45.3%, over the last one year.

PrivateBancorp, Inc. also recorded an upward earnings estimate revision of 4.7% for 2017, over the past 60 days.  Its share price is up 54.6%, over the last one year.

MainSource Financial Group, Inc. earnings estimates have been revised upward by nearly 6.7%, over the past two months. Its share price rallied 63.6% in the last one year.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

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