Underlying strength and good growth prospects make Community Bank System, Inc. (CBU - Free Report) a solid bet now. The company’s Zacks Consensus Estimate for the current-year earnings has been revised 6.1% upward over the last 60 days, indicating analysts’ optimism about its earnings growth potential.
As a result, the stock currently sports a Zacks Rank #1 (Strong Buy).
The stock has gained 10.7% in a year’s time, underperforming the 21.2% growth for the industry it belongs to. Nevertheless, given the positive estimate revisions and a solid Zacks Rank, we expect the price performance to improve in the near term.
Here are a few factors that make the stock a viable investment option.
Earnings per Share (EPS) Growth: Community Bank System has witnessed EPS growth of nearly 4% in the last three-five years. This earnings momentum is likely to continue in the near term, as reflected by the company’s projected EPS growth of 10.9% and 5.3% for 2017 and 2018, respectively.
Also, the company has animpressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average beat being 10.1%.
Revenue Strength: Community Bank System’s revenues have increased at a CAGR of 7.4% in the past four years (2013-2016). Moreover, the company’s projected sales growth of 23% and 8.8% for 2017 and 2018, respectively, are impressive.
Superior Return on Equity (ROE): The company has an ROE of 9.04%, better than the industry average of 8.57%. This shows that the company reinvests its cash more efficiently.
Strong Leverage: Community Bank System’s debt/equity ratio is 0.08 compared with the industry average of 0.55, indicating a relatively lower debt burden. It indicates the company’s financial stability even in adverse economic conditions.
Other Stocks to Consider
A few other top-ranked stocks in the finance space are The Toronto-Dominion Bank (TD - Free Report) , First Bank (FRBA - Free Report) and FB Financial Corporation (FBK - Free Report) .
Toronto-Dominion has witnessed an upward earnings estimate revision of 13.2% for the current fiscal year over the past 60 days. Its share price has increased 26.7% in the past year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
First Bank’sZacks Consensus Estimate for the current year has remained stablein the last 60 days. Its shares have gained 49.5% in the past 12 months. It carries a Zacks Rank #2 (Buy).
FB Financial Corporation also carries a Zacks Rank #2. The stock has witnessed an upward earnings estimate revision of 2.7% for the current year over the past 60 days. Its shares price has increased nearly 73.3% in a year’s time.
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