It seems to be a wise idea to add Hancock Whitney Corporation (HWC - Free Report) stock to your portfolio now, given its solid liquidity position, continued rise in loan and deposit balances, and strategic initiatives to enhance revenues. Also, higher interest rates will support growth.
The Zacks Consensus Estimate has moved nearly 1% higher for both 2019 and 2020 over the past 60 days. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Hancock’s price performance also looks encouraging. Its shares have rallied 22.6% in the past three months.
Here are the factors that make Hancock Whitney stock a solid bet now.
Earnings strength: Hancock Whitney’s earnings have grown at the rate of 12.1% over the past three to five years. With favorable operating backdrop, the momentum is expected to continue in the near term. The company’s earnings are expected to grow 4% and 5.8% in2019 and 2020, respectively.
Further, the company’s long-term (three-five years) estimated EPS growth rate of 8% ensures reward for shareholders.
Further, the stock 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.
Revenue growth: Supported by rising loan balances and various strategic initiatives to enhance revenues, Hancock Whitney’s net revenues (on tax equivalent basis) have witnessed CAGR of 6.5% over the past five years (2014-2018). Strategic investments in growth markets are not only expected to be accretive to earnings but will also bolster the bank’s presence in such areas.
The company’s projected consensus sales growth rates of 6.4% and 4.1% for 2019 and 2020, respectively, indicate continued upward momentum in revenues.
Strong leverage: Hancock Whitney’s debt/equity ratio is 0.07 compared with the industry average of 0.22. The relatively strong financial health of the company should help it perform better than its peers amid a dynamic business environment.
Superior Return on Equity (ROE): Hancock Whitney’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholder funds compared with its peers. The company has an ROE of 11.64%, higher than the industry average of 10.11%.
Stock looks undervalued: Hancock Whitney’s looks undervalued when compared with the broader industry. Its current price/earnings (F1) and price/book ratios are below the respective industry averages.
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 or 2, offer the best upside potential.
Other Stocks Worth a Look
Some other top-ranked stocks in the same space include Capital City Bank Group (CCBG - Free Report) , Franklin Financial Network, Inc. (FSB - Free Report) and Popular, Inc. (BPOP - Free Report) . All these stocks currently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Capital City Bank haswitnessed 15.5% upward revision in its Zacks Consensus Estimate for 2019, over the past 60 days. Its shares have moved marginally upward over the past three months.
In the past 60 days, Franklin Financial’s earnings estimates for the current year have been revised 2.7% upward. Over the past three months, its shares haverallied 12.9%.
Over the past 60 days, Popular, Inc. has witnessed upward earnings estimate revision of 2.6% for 2019. Also, its shares have increased 17.5% over the past three months.
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