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Why Wintrust Financial is Worth Adding to Your Portfolio

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Performance of the major banks in third-quarter 2018 was quite impressive. Favorable economic data, the Fed’s recent rate hikes and tax reform benefits boosted investors’ confidence in banking stocks. Therefore, some of these stocks can be profitable additions to your portfolio, supported by robust fundamentals and encouraging long-term prospects.

Thus, this is the right time to add a few banking stocks to your portfolio. Today, we bring one such stock — Wintrust Financial Corporation (WTFC - Free Report) — that continues to depict strong fundamentals and improving prospects.  

This Zacks Rank #2 (Buy) stock not only beat third-quarter estimates but also has been witnessing upward estimate revisions, reflecting analysts’ optimism about its future prospects. Over the last 60 days, the Zacks Consensus Estimate for both 2018 and 2019 has increased slightly.

Further, the stock has gained 15.8% in the past two years, outperforming 10.4% growth recorded by the industry it belongs to.



Notably, Wintrust Financial has a number of other aspects that make it an attractive investment option.

Revenue Strength: Wintrust Financial continues to witness top line improvement. Since 2013, the company has recorded a consistent rise in its sales, witnessing five-year compound annual growth rate (CAGR) of nearly 10.4% in 2017.

The company’s projected sales growth (F1/F0) of 16.1% (as against the industry average of about 7.9%) indicates constant upward momentum in revenues.

Earnings Growth: Wintrust Financial witnessed earnings growth of 14.8% in the last three to five years. In addition, the company’s long-term (three to five years) estimated EPS growth rate of 13.5% promises rewards for investors over the long run. Notably, the company also delivered an average positive earnings surprise of 4.84% over the trailing four quarters.

Furthermore, earnings momentum is likely to continue in the near term as indicated by the company’s projected EPS growth rate of 37.7% for the current year.

Superior ROE: Wintrust Financial’s return on Equity (ROE) ratio is 11.27% compared with the industry average of 10.52%. This indicates that the company reinvests more efficiently compared to the industry.

Stock Looks Undervalued: The stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style 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

Greenhill & Co., Inc. (GHL - Free Report) has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks Rank #1 stock has rallied more than 21% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

JPMorgan (JPM - Free Report) has been witnessing upward estimate revisions for the past 60 days. Further, the company’s shares have gained slightly year to date. Currently, it carries a Zacks Rank of 2.

Great Southern Bancorp, Inc. (GSBC - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped around 4.4% year to date. It currently carries a Zacks Rank #2.

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