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Why Texas Capital (TCBI) is an Attractive Pick Right Now?
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Shares of Texas Capital Bancshares, Inc. (TCBI - Free Report) have surged 67% over the last six months, outpacing the 27% gain for the Zacks categorized Banks - Southwest industry. While one might think that this rally will not be sustainable as the stock has reached too high too fast, a closer look at its fundamentals shows that there is more upside left.
Primarily, as the finance industry is expected to gain from lesser regulations, lower taxes and better interest rate environment under the Trump administration, Texas Capital is likely to be a beneficiary. Moreover, the company is well-positioned to benefit from rising interest rates.
It is focusing on becoming an independent bank, primarily for middle market business customers and high net worth individuals in each of the five major metropolitan markets of Texas. With the Texas economy showing a decent improvement, the company will likely experience better business.
Supporting this positive view, the Zacks Consensus Estimate for the current year earnings has revised 6.8% higher over the past 60 days. As a result, the stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s take a look at the company’s underlying strength:
Revenue Growth: Organic growth remains Texas Capital’s key strength. Its revenues have increased at a compounded annual growth rate (CAGR) of 12% over the last five years (2012–2016). Further, the top line is expected to grow 18.3% in 2017.
Earnings Strength: The company has recorded earnings per share (EPS) growth of 33.6% over the past 3-5 years compared with 8.7% for the industry. The earnings momentum is likely to continue in the near term as evident from its projected EPS growth rate of 30.5% for the current year.
Improving Cash Flow: Texas Capital has seen historical cash flow growth of 15.7% compared with 8.1% for the industry. The company’s current cash flow growth rate of 9.7% is also better than the industry’s 3.8%.
Other Stocks to Consider
Other stocks worth considering from the finance space space include BancFirst Corporation (BANF - Free Report) , Southside Bancshares, Inc. (SBSI - Free Report) and Bank of America Corporation (BAC - Free Report) . All these stocks carry a Zacks Rank# 2 (Buy).
BancFirst Corporation witnessed an upward earnings estimate revision of 1.3% over the past 60 days. Also, its share price is up 59.5% year to date.
Southside Bancshares, Inc. earnings estimates moved north by roughly 3% over the past 60 days and its share price is up 31 % year to date.
Bank of America Corporation’s earnings estimates have been revised upward by 5.5% over the past two months. Moreover, its share price is up 90.4% year to date.
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Why Texas Capital (TCBI) is an Attractive Pick Right Now?
Shares of Texas Capital Bancshares, Inc. (TCBI - Free Report) have surged 67% over the last six months, outpacing the 27% gain for the Zacks categorized Banks - Southwest industry. While one might think that this rally will not be sustainable as the stock has reached too high too fast, a closer look at its fundamentals shows that there is more upside left.
Primarily, as the finance industry is expected to gain from lesser regulations, lower taxes and better interest rate environment under the Trump administration, Texas Capital is likely to be a beneficiary. Moreover, the company is well-positioned to benefit from rising interest rates.
It is focusing on becoming an independent bank, primarily for middle market business customers and high net worth individuals in each of the five major metropolitan markets of Texas. With the Texas economy showing a decent improvement, the company will likely experience better business.
Supporting this positive view, the Zacks Consensus Estimate for the current year earnings has revised 6.8% higher over the past 60 days. As a result, the stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s take a look at the company’s underlying strength:
Revenue Growth: Organic growth remains Texas Capital’s key strength. Its revenues have increased at a compounded annual growth rate (CAGR) of 12% over the last five years (2012–2016). Further, the top line is expected to grow 18.3% in 2017.
Earnings Strength: The company has recorded earnings per share (EPS) growth of 33.6% over the past 3-5 years compared with 8.7% for the industry. The earnings momentum is likely to continue in the near term as evident from its projected EPS growth rate of 30.5% for the current year.
Improving Cash Flow: Texas Capital has seen historical cash flow growth of 15.7% compared with 8.1% for the industry. The company’s current cash flow growth rate of 9.7% is also better than the industry’s 3.8%.
Other Stocks to Consider
Other stocks worth considering from the finance space space include BancFirst Corporation (BANF - Free Report) , Southside Bancshares, Inc. (SBSI - Free Report) and Bank of America Corporation (BAC - Free Report) . All these stocks carry a Zacks Rank# 2 (Buy).
BancFirst Corporation witnessed an upward earnings estimate revision of 1.3% over the past 60 days. Also, its share price is up 59.5% year to date.
Southside Bancshares, Inc. earnings estimates moved north by roughly 3% over the past 60 days and its share price is up 31 % year to date.
Bank of America Corporation’s earnings estimates have been revised upward by 5.5% over the past two months. Moreover, its share price is up 90.4% year to date.
8 Stocks with Huge Profit Potential Just released:
Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>