Independent Bank Corp. (INDB - Free Report) looks like a promising bet now, backed by its organic growth strategies that have placed it well for the future. Moreover, a strong capital and liquidity position will support profitability.
The company’s price performance also seems impressive. Its shares have gained 11.2% over the past year against 13.6% decline of the industry.
Notably, over the past 60 days, earnings estimates for this Zacks Rank #2 (Buy) stock have remained unchanged for the current year.
Why the Stock is an Attractive Choice
Earnings strength: Independent Bank witnessed earnings per share (EPS) growth of 11.6% over the last three to five years, higher than the industry average of 10.1%. Moreover, this uptrend is likely to continue in the near term as reflected by its projected EPS growth rate of 39.4% for 2018 (higher than the industry average of 22.1%).
In fact, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average beat of 0.8%.
Revenue growth: Organic growth remains strong for Independent Bank. Revenues witnessed a compound annual growth rate (CAGR) of 7.1% over the last five years (2013-2017). Further, the momentum is expected to continue as higher interest rates and improving economy are likely to support the top line. Notably, revenues are expected to rise 12.9% in 2018 and 23.2% in 2019.
Synergies from acquisitions: Independent Bank has expanded into new markets, with its inorganic growth strategies. Recently, the bank completed its deal to acquire MNB Bancorp. The deal 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 boosted Independent Bank’s profitability. Given a strong liquidity position, the bank will likely continue following such growth strategy in the quarters ahead.
Superior Return on Equity (ROE): Independent Bank has an ROE of 12.21% compared with the industry average of 9.80%. This indicates that the company reinvests its cash more efficiently compared with its peers.
Strong leverage: The company has a debt/equity ratio of 0.2 compared with the industry average of 0.4. This reflects that it has a lower debt burden relative to its peers and it is likely to be able to perform better even in a dynamic business environment.
Other Stocks to Consider
Credit Acceptance Corporation’s (CACC - Free Report) Zacks Consensus Estimate for the current year has increased 1% over the past 60 days. Its share price has increased 42.2% over the past year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Bancorp (USB - Free Report) currently carries a Zacks Rank #2. The stock has witnessed a marginal upward earnings estimate revision for the current year over the past 60 days. In the past year, shares of the company have gained 2.2%.
Ares Capital Corporation’s (ARCC - Free Report) Zacks Consensus Estimate for the current year has been revised 2.5% upward over the past 60 days. Its shares gained 4.2% in the last 12 months. Currently, it also carries a Zacks Rank #2.
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