Independent Bank Corp. (INDB - Free Report) is a promising bet now, backed by its organic growth strategies that have placed it well for the future. Also, a strong capital and liquidity profile will support the company’s profitability.
Further, analysts seem to be optimistic about its prospects as the stock is witnessing upward estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for earnings has moved north by 1.1% and 2.1% for 2018 and 2019, respectively. Backed by these upward estimate revisions, the company currently carries a Zacks Rank #2 (Buy).
Also, the stock has rallied 15.9% so far this year, outperforming the industry’s rise of 4.3%.
Why the Stock is an Attractive Choice
Earnings strength: Independent Bank has recorded an earnings growth rate of 9.3% over the last three to five years. The earnings growth rate for the current year is expected to be 32.2% compared with the industry average of 21%.
Further, it has a Growth Score of B. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential. Hence, Independent Bank looks promising at present.
Revenue growth: Organic growth remains strong at the bank. Revenues witnessed a compound annual growth rate of 7.1% over the last five years (2013-2017). Further, the momentum is expected to continue as higher interest rates and improving economy will support top line. Notably, revenues are expected to rise 9.8% in 2018 and 9.1% for 2019.
Synergies from acquisitions: Independent Bank has expanded into new markets with its inorganic growth strategies. In fact, in May, the bank announced a deal to acquire MNB Bancorp., which is projected to be accretive to 2019 earnings.
Over the last three years, the company acquired The Edgartown National Bank, Bank of Cape Cod and Peoples Federal Savings Bank. These buyouts have boosted Independent Bank’s profitability. Given the strong liquidity position, the bank will likely continue following such growth strategy in the quarters ahead.
Superior Return on Equity: Independent Bank has a return on equity of 10.49% compared with the industry average of 8.88%. This indicates that the company reinvests more efficiently compared to its peers.
Strong leverage: It has debt/equity ratio of 0.17 compared with the industry’s 0.44. This reflects relatively strong financial health of the company, which will help it perform better than its peers under a dynamic business environment.
Other Stocks to Consider
OFG Bancorp’s (OFG - Free Report) earnings estimates have been revised 17.9% upward for 2018, in the past 60 days. Also, its share price has jumped 52.7% year to date. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Community Bank System, Inc.’s (CBU - Free Report) earnings estimates for 2018 have been revised 4% upward, over the last 60 days. Further, this Zacks Rank #2 stock has rallied 12.6% so far this year.
With a Zacks Rank #2, First Commonwealth Financial Corporation (FCF - Free Report) has witnessed a marginal upward earnings estimates revision for the current year, in the past 60 days. Moreover, so far this year, its shares have gained 11.7%.
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