As we continue to approach earnings season, it is important to realize that earnings estimates, estimate revisions, and actual results directly affect the Zacks Rank. Furthermore, companies that consistently defeat earnings estimates can not only witness upward share price movement, but are also known to possess strong management and an optimistic financial future, which are all great signs for investors.
Luckily, Zacks Premium customers can utilize the Earnings ESP (Expected Surprise Prediction) filter in order to search for stocks that are expected to defeat their earnings estimates. A positive Earnings ESP, along with a Zacks Rank of #3 (Hold) or better, can be a solid indicator of an impending earnings surprise.
Today we’ll be looking specifically at the finance sector, which is normally known to be more stable. But that doesn’t mean earnings surprises are off the table! Check out these 5 finance stocks that are projected to beat earnings projections and aim to step ahead of the competition:
1. TD Ameritrade Holding Corporation (AMTD - Free Report)
TD Ameritrade Holding Corporation has servicing self-directed investors through its brokerage subsidiaries. The company constantly attempts to reward its shareholders, and during fiscal 2016, the company returned approximately 80% of its net income to shareholders through dividends and share repurchases. Also, TD Ameritrade’s association with TD Bank provides an opportunity for both firms to cross-sell products. The alliance with TD Bank increases chances of expanding by opening brokerage offices within many of the bank’s current branches, which can function as a significant growth driver.
TD Ameritrade holds an “A” grade for Momentum and “B” grade for growth, which shows that the company’s share price has performed well recently, while the firm also exhibits excellent future growth prospects. TD Ameritrade features a RoE of 16.46% and net margin of 24.93%, both of which compare favorably to the industry averages of 8.69% and 4.61%. Finally, since the firm possesses an Earnings ESP of 2.44%, TD Ameritrade looks more desirable, especially with its Zacks Rank #2 (Buy) just ahead of earnings season.
2. ProLogis, Inc. (PLD - Free Report)
ProLogis, Inc. is engaged in the acquisition, development, and operation of industrial properties in North America, Europe, and Asia. ProLogis has a strong development expertise and completed 34 build-to-suit projects, aggregating over 12.3 million square feet of space in 2016. Notably, the company’s square footage of its 2016 build-to-suit starts escalated more than 15% over 2015. Additionally, ProLogis sports a beta rating of 0.94, while paying a strong dividend yield of 3.05%.
Prologis features a debt/capital ratio of 38.30% and a projected EPS growth of 7.11%, both of which fare well against the industry averages of 45.91% and 2.61%, respectively. Also, ProLogis’s cash/price ratio of 9.47 defeats the industry average of 2.10. The company has been a model of consistency, as ProLogis has beaten its earnings projections in each of its past twenty operational quarters. ProLogis possesses a Zacks Rank #2 (Buy), as well as an Earnings ESP of 2.56%, which should provide investors confidence in the stock prior to its quarterly earnings release.
3. IBERIABANK Corporation (IBKC - Free Report)
IBERIABANK Corporation is a commercial bank holding company that also possesses the largest bank in the state of Louisiana. This company operates in the southeastern banking industry, which currently sits in the top 31% of the Zacks Industry Rank. IBERIABANK’s share price has skyrocketed by 31.94% in the past year, and the company has continued to pay its shareholders a 1.76% dividend yield.
IBERIABANK maintains a projected sales growth of 12.76% and current cash flow growth of 16.39%, both of which defeat the industry averages of 1.87% and 10.79%, respectively. Further, the company holds a cash flow per share of $4.58 in comparison to the industry average of $1.77. IBERIABANK holds an Earnings ESP of 0.89%, which should create an optimistic view for the Zacks Rank #2 (Buy) stock heading into the quarterly earnings season.
4. Wintrust Financial Corporation (WTFC - Free Report)
Wintrust Financial Corporation is a bank holding company which provides banking services, trust and investment services, commercial insurance premium financing, and certain administrative services. Wintrust holds an “A” grade for Value, which means that the company is largely viewed as undervalued. Also, Wintrust Financial has defeated its earnings projections in each of its past five operational quarters by an impressive average of 9.24%.
Wintrust Financial possesses a debt/capital ratio of 23.70% and current cash flow growth of 26.43%, both of which compare favorably to the industry averages of 30.74% and 14.38%. Not to mention, the company holds an impressive debt/equity of 0.34 and strong EV/EBITDA of 9.90. Wintrust Financial Corporation sports a Zacks Rank #2 (Buy) and an Earnings ESP of 1.02%, which provides the firm a positive outlook as we near its reporting date.
5. Comerica Incorporated (CMA - Free Report)
Comerica Inc. is a registered bank holding company that is made up of its business bank, individual bank, and investment bank divisions. The successful clearance of the Fed stress test in 2017 indicates that Comerica is well positioned to weather any severe economic downturn. Further, Comerica currently sponsors a $440 million share buyback program and continues to pay a respectable 1.39% dividend yield to its shareholders. Also, the company features a “B” grade in Growth, which signifies that Comerica boasts ample future expansion opportunities.
Comerica’s share price has exploded by a whopping 75.30% in the past year. Also, Comerica features a debt/equity ratio of 0.65 and PEG ratio of 0.87, both of which beat the industry averages of 0.86 and 1.87. Further, Comerica boasts a strong projected sales growth of 9.43% in comparison to the industry average of 6.57%. Finally, Comerica’s combination of a Zacks Rank #2 (Buy) and an Earnings ESP of 4.67 will boost its expectations heading into earnings season.
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