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3 Reasons Why You Should Bet on Preferred Bank (PFBC) Stock

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Preferred Bank (PFBC - Free Report) stock seems to be a solid bet now, based on strength in fundamentals and earnings growth prospects. The company’s share price has increased 3.7% so far this year compared with 2.2% decline for the industry it belongs to.

Moreover, the company’s Zacks Consensus Estimate for the current year earnings has been revised 4.9% upward over the last 30 days, indicating analysts’ optimism about its earnings growth potential. As a result, the stock currently carries a Zacks Rank #2 (Buy).

Given the positive estimate revisions and a solid Zacks Rank, we expect its price performance to further improve in the near term.



The other aspects that make the stock an attractive investment option are:

Earnings per Share (EPS) Growth: Preferred Bank has witnessed EPS growth of nearly 27.6% in the last three-five years, higher than the industry’s growth of 14.3%. Moreover, this earnings momentum is likely to continue in the near term, as reflected by the company’s projected EPS growth of 25.7% and 13.8% for 2017 and 2018, respectively.

Also, the company’s long-term (five years) estimated EPS growth rate of 10% promises rewards for investors in the long run.

Superior Return on Equity (ROE): Preferred Bank has an ROE of 11.33%, better than the industry average of 9.51%. This shows that the company reinvests its cash more efficiently.

Stock Seems Undervalued: On the basis of the price to earnings (P/E) ratio, the stock looks undervalued. The company’s P/E (F1) ratio stands at 16.86, lower than the industry average of 17.01.

Also, Preferred Bank has a Value Score of B. Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.

Other Stocks to Consider

Other top-ranked stocks in the finance space are Carolina Financial Corporation , Raymond James Financial, Inc. (RJF - Free Report) and Comerica Incorporated (CMA - Free Report) .

Carolina Financial witnessed an upward earnings estimate revision of 4.5% for the current year, over the last 30 days. Its share price has increased 60.5% in the last 12 months. The company currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Raymond James Financial’s earnings estimates for the current fiscal year have remained stable over the past 30 days. Its shares have gained 42.1% in the last 12 months. It carries a Zacks Rank #2.

Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 3.7% for the current year, over the last 30 days. Its share price has increased 56% in a year’s time.

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Comerica Incorporated (CMA) - free report >>

Raymond James Financial, Inc. (RJF) - free report >>

Preferred Bank (PFBC) - free report >>

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