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4 Reasons to Invest in Cathay General Bancorp (CATY) Stock
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It seems to be a wise idea to add Cathay General Bancorp (CATY - Free Report) stock to your portfolio now, given its underlying strength and solid growth prospects.
Analysts are optimistic about the company’s earnings growth potential. The Zacks Consensus Estimate for earnings has been revised marginally upward for 2018 and 2019, over the last 30 days. As a result, the stock carries a Zacks Rank #2 (Buy).
However, shares of Cathay General Bancorp have gained 4.5% over the last year compared with 10.7% growth recorded by the industry.
Given the positive estimate revision and a solid Zacks Rank, the stock has upside potential.
Cathay General Bancorp has a number of other aspects that make it an attractive investment option.
Revenue growth: Cathay General Bancorp continues to make steady progress toward improving its top line. The bank’s revenues have witnessed a CAGR of 7% in the last five years (2013-2017). Also, the company’s projected sales growth (F1/F0) of 11.6% (the industry average is about 6.2%) indicates constant upward momentum in revenues.
Earnings strength: Cathay General Bancorp witnessed earnings growth of 14.3% in the last three to five years, higher than the industry average of 11.5%. The upward trend in earnings is expected to continue in the near term as well. The projected EPS growth rate for 2018 and 2019 is 28.9% and 7.3%, respectively.
In addition, the company’s long-term (three to five years) estimated EPS growth rate of 8.0% promises rewards for investors over the long run.
Superior Return on Equity (ROE): Cathay General Bancorp’s ROE of 10.46% compared with the industry average of 9.79%, highlights the company’s commendable position over its peers.
Stock seems undervalued: Cathay General has a P/E ratio and P/B ratio of 12.31 and 1.60 compared with the industry average of 14.40 and 1.69, respectively. Based on these ratios, the stock seems undervalued.
Further, the stock 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.
Park National Corporation is estimated to witness 27.8% rise in 2018 earnings. Over the past year, the company’s share price has jumped 1.9%.
Heartland Financial is estimated to witness 28% rise in 2018 earnings. Moreover, over the past year, its share price has increased 7%.
Carolina Financial is likely to record 39.7% year-over-year increase in 2018 earnings. Further, its share price has risen 36.6%, over the past year.
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4 Reasons to Invest in Cathay General Bancorp (CATY) Stock
It seems to be a wise idea to add Cathay General Bancorp (CATY - Free Report) stock to your portfolio now, given its underlying strength and solid growth prospects.
Analysts are optimistic about the company’s earnings growth potential. The Zacks Consensus Estimate for earnings has been revised marginally upward for 2018 and 2019, over the last 30 days. As a result, the stock carries a Zacks Rank #2 (Buy).
However, shares of Cathay General Bancorp have gained 4.5% over the last year compared with 10.7% growth recorded by the industry.
Given the positive estimate revision and a solid Zacks Rank, the stock has upside potential.
Cathay General Bancorp has a number of other aspects that make it an attractive investment option.
Revenue growth: Cathay General Bancorp continues to make steady progress toward improving its top line. The bank’s revenues have witnessed a CAGR of 7% in the last five years (2013-2017). Also, the company’s projected sales growth (F1/F0) of 11.6% (the industry average is about 6.2%) indicates constant upward momentum in revenues.
Earnings strength: Cathay General Bancorp witnessed earnings growth of 14.3% in the last three to five years, higher than the industry average of 11.5%. The upward trend in earnings is expected to continue in the near term as well. The projected EPS growth rate for 2018 and 2019 is 28.9% and 7.3%, respectively.
In addition, the company’s long-term (three to five years) estimated EPS growth rate of 8.0% promises rewards for investors over the long run.
Superior Return on Equity (ROE): Cathay General Bancorp’s ROE of 10.46% compared with the industry average of 9.79%, highlights the company’s commendable position over its peers.
Stock seems undervalued: Cathay General has a P/E ratio and P/B ratio of 12.31 and 1.60 compared with the industry average of 14.40 and 1.69, respectively. Based on these ratios, the stock seems undervalued.
Further, the stock 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 stocks in the banking space worth a look are Park National Corporation (PRK - Free Report) , Heartland Financial USA, Inc. (HTLF - Free Report) and Carolina Financial Corporation . All these carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Park National Corporation is estimated to witness 27.8% rise in 2018 earnings. Over the past year, the company’s share price has jumped 1.9%.
Heartland Financial is estimated to witness 28% rise in 2018 earnings. Moreover, over the past year, its share price has increased 7%.
Carolina Financial is likely to record 39.7% year-over-year increase in 2018 earnings. Further, its share price has risen 36.6%, over the past year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>