A favorable operating backdrop with the Fed’s plans to unwind its giant balance sheet and keep increasing interest rates as well as investors’ optimism over potential tax reforms should continue to support banking stocks. Keeping this in mind, we have chosen BancFirst Corporation (BANF - Free Report) for your consideration.
A positive trend in estimate revisions reflect optimism over the company’s earnings growth prospects. The company has seen the Zacks Consensus Estimate for its current-quarter earnings being revised 14.5% upward over the last 90 days. Also, the current-year’s earnings estimates have climbed 12.5%. As a result, the stock currently carries a Zacks Rank #1 (Strong Buy).
Here’s What Might Drive the Stock Higher
Earnings Strength: While BancFirst’s historical earnings per share (EPS) growth rate of 8.2% compares favorably with the industry average of 5.6%, investors should really focus on projected EPS growth (F1/F0). Here, the company is looking to grow at a rate of 25.5%, substantially higher than the industry average of 20.5%.
Further, the long-term (three-five years) expected EPS growth of 10% promises rewards for the shareholders.
Revenue Growth: Organic growth remains strong at BancFirst. Revenues witnessed a compound annual growth rate of 5.8% over the last three years (2014-2016). Further, the top line is expected to increase 9.5% in 2017 compared with no growth for the industry.
Favorable ROE: BancFirst’s return on equity (ROE) supports its growth potential. Its ROE of 11.4% compares with the industry average of 10.2%, implying that it is efficient in using its shareholders’ funds.
Leverage: BancFirst Corporation has a debt/equity ratio of 0.04 compared with the industry’s average of 0.59. This leverage status should help the company perform better than its peers in a volatile business environment.
The stock has gained 57.1% in the past 12 months, widely outperforming the industry’s 25.8% rally.
Other Stocks to Consider
Some other top-ranked stocks from the finance space are AeroCentury Corp. (ACY - Free Report) , Royal Bank of Canada (RY - Free Report) and Virtus Investment Partners, Inc (VRTS - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AeroCentury Corp has witnessed upward earnings estimate revision of 9.9% for the current year in the past 60 days. Also, its shares have gained 49.6% in the past 12 months.
Royal Bank of Canada’s current-year earnings estimates have been revised 9.4% upward over the last 60 days. Further, its shares have rallied 26.2% in a year.
The Zacks Consensus Estimate for Virtus Investment Partners has been revised 1% upward for the current year over the last 60 days. Its share price has witnessed a 21% increase over the past year.
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