During the last earnings season, the Finance sector was one of the best performers. Despite inflation-related issues and increasing chances of political uncertainty, we can add some banking stocks to our portfolio based on their strong fundamentals and robust long-term growth opportunities.
Sandy Spring Bancorp, Inc. (SASR - Free Report) is one such stock that has been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 60 days, the Zacks Consensus Estimate for 2017 inched up 1.2%.
Further, this Zacks Rank #2 (Buy) stock has gained around 21.8% in a year's time, outperforming its industry’s 17.3% increase.
Notably, Sandy Spring Bancorp has a number of other aspects to make it an attractive investment option.
Why the Stock is an Attractive Choice?
Earnings Strength: Sandy Spring Bancorp recorded earnings growth rate of 7.4% over the last three to five years. Retaining the earnings momentum, the earnings growth rate for the current year is anticipated to be 25.5% compared with the industry average of 10.5%. Good news is that the company recorded an average positive earnings surprise of 9.1% over the trailing four quarters.
Revenue Growth: Organic growth remains solid at Sandy Spring Bancorp. Revenues witnessed a compound annual growth rate of 3.8% over the last five years (2012-2016), with some volatility. Further, the top line is projected to increase 16.3% in 2017 and 48.5% in 2018.
Superior Return on Equity: Sandy Spring Bancorp has a return on equity of 10.44% compared with the industry average of 8.57%. This indicates that the company reinvests more efficiently compared to its peers.
Stock is Undervalued: Sandy Spring Bancorp has P/E and P/B ratios of 15.36 and 1.67 compared to the S&P 500 average of 18.53 and 3.07, respectively. Based on these ratios, the stock seems undervalued.
Other Stocks to Consider
Some other top-ranked stocks in the same space are FB Financial Corporation (FBK - Free Report) , LPL Financial Holdings Inc. (LPLA - Free Report) and Salisbury Bancorp, Inc. (SAL - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FB Financial’s earnings estimates have been revised 3.2% upward for 2017, in the past 60 days. Also, its share price has surged 41.4% in a year’s time.
LPL Financial’s earnings estimates for 2017 have been revised 4.1% upward, over the last 60 days. Further, in a year’s time, the company’s shares have jumped 55%.
Salisbury Bancorp witnessed a 2.4% upward earnings estimates revision for the current year, in a month’s time. Moreover, in the past year, its shares have gained 41.4%.
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