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Stifel Financial's (SF) Shares Rally on Q1 Earnings Beat
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Following a positive earnings surprise of 7.3% in first-quarter 2019, shares of Stifel Financial Corp. (SF - Free Report) climbed 1.05%. The company reported net income of $1.32 per share available to common shareholders, beating the Zacks Consensus Estimate of $1.23. Further, the figure comes in higher than the prior-year tally of $1.15.
Results reflected improved top line and a strong capital position. However, higher operating expenses were a major drag.
On a GAAP basis, Stifel Financial reported net income available to common shareholders of $96.9 million or $1.22 per share compared with net income of $86.4 million or $1.06 in the year-ago quarter. The results included certain non-recurring items.
Revenues Improve, Expenses Flare Up
Net revenues came in at $770.4 million, up 2.6% year over year. The upside was mainly driven by higher other income and interest revenues, partly offset by lower brokerage, investment banking along with asset management and service fees revenues. Further, the revenue figure outpaced the Zacks Consensus Estimate of $741.5 million.
Global Wealth Management segment’s net revenues increased 5.2% year over year, while Institutional Group’s net revenues slipped 3.3%. Other revenues were a negative $1.5 million compared with a negative $5.3 million in the prior-year quarter.
Stifel Financial’s non-interest expenses were $632.6 million, up 0.3% from the year-ago quarter. The mounting non-interest operating expenses mainly are a result of a rise in commissions and floor brokerage, and elevated provision for loan losses. Lower other operating expenses were a tailwind.
Credit Quality: A Mixed Bag
Credit quality was a mixed bag in the reported quarter. Allowance, as a percentage of loans, inched up to 1% from 0.97% in the prior-year quarter. Yet, non-performing assets as a percentage of total assets, edged down to 0.13% from 0.14% in the year-earlier quarter.
Strong Capital Position
Stifel Financial’s capital position was strong during the first quarter. As of Mar 31, 2019, total assets improved 11.3% to $16.8 billion from $15.2 billion as of Mar 31, 2018. Book value came in at $43.18 per share, up 12.2% from the prior-year quarter. Stockholders’ equity increased 9.1% year over year to $1.2 billion.
As of Mar 31, 2019, the company’s Tier 1 leverage capital ratio was 9.8% compared with 9.6% as of Mar 31, 2018. Further, Tier 1 risk-based capital ratio was 18.5% compared with 18.7% as of Mar 31, 2018.
Our Viewpoint
Stifel Financial, with its solid business model and strategic acquisitions, is well poised for growth. While the company’s sound capital position and robust top-line performance will boost results over the long haul, sluggish economic recovery, regulatory issues and escalating expenses raise concerns.
Stifel Financial Corporation Price, Consensus and EPS Surprise
E*TRADE Financial delivered a positive earnings surprise of 16% in the January-March quarter. Earnings of $1.09 per share comfortably surpassed the Zacks Consensus Estimate of 94 cents. Moreover, the results compared favorably with 88 cents recorded in the prior-year quarter.
Charles Schwab’s (SCHW - Free Report) first-quarter 2019 earnings of 69 cents per share surpassed the Zacks Consensus Estimate of 66 cents. Also, earnings increased 25% from the prior-year quarter. Revenue growth (driven by a rise in interest income) and an increase in total client assets aided the results. However, higher expenses and lower trading revenues acted as headwinds.
TD Ameritrade Holding Corporation (AMTD - Free Report) reported second-quarter fiscal 2019 (ending Mar 31) earnings of 93 cents per share, in line with the Zacks Consensus Estimate. The figure jumped 27% from the prior-year quarter.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Stifel Financial's (SF) Shares Rally on Q1 Earnings Beat
Following a positive earnings surprise of 7.3% in first-quarter 2019, shares of Stifel Financial Corp. (SF - Free Report) climbed 1.05%. The company reported net income of $1.32 per share available to common shareholders, beating the Zacks Consensus Estimate of $1.23. Further, the figure comes in higher than the prior-year tally of $1.15.
Results reflected improved top line and a strong capital position. However, higher operating expenses were a major drag.
On a GAAP basis, Stifel Financial reported net income available to common shareholders of $96.9 million or $1.22 per share compared with net income of $86.4 million or $1.06 in the year-ago quarter. The results included certain non-recurring items.
Revenues Improve, Expenses Flare Up
Net revenues came in at $770.4 million, up 2.6% year over year. The upside was mainly driven by higher other income and interest revenues, partly offset by lower brokerage, investment banking along with asset management and service fees revenues. Further, the revenue figure outpaced the Zacks Consensus Estimate of $741.5 million.
Global Wealth Management segment’s net revenues increased 5.2% year over year, while Institutional Group’s net revenues slipped 3.3%. Other revenues were a negative $1.5 million compared with a negative $5.3 million in the prior-year quarter.
Stifel Financial’s non-interest expenses were $632.6 million, up 0.3% from the year-ago quarter. The mounting non-interest operating expenses mainly are a result of a rise in commissions and floor brokerage, and elevated provision for loan losses. Lower other operating expenses were a tailwind.
Credit Quality: A Mixed Bag
Credit quality was a mixed bag in the reported quarter. Allowance, as a percentage of loans, inched up to 1% from 0.97% in the prior-year quarter. Yet, non-performing assets as a percentage of total assets, edged down to 0.13% from 0.14% in the year-earlier quarter.
Strong Capital Position
Stifel Financial’s capital position was strong during the first quarter. As of Mar 31, 2019, total assets improved 11.3% to $16.8 billion from $15.2 billion as of Mar 31, 2018. Book value came in at $43.18 per share, up 12.2% from the prior-year quarter. Stockholders’ equity increased 9.1% year over year to $1.2 billion.
As of Mar 31, 2019, the company’s Tier 1 leverage capital ratio was 9.8% compared with 9.6% as of Mar 31, 2018. Further, Tier 1 risk-based capital ratio was 18.5% compared with 18.7% as of Mar 31, 2018.
Our Viewpoint
Stifel Financial, with its solid business model and strategic acquisitions, is well poised for growth. While the company’s sound capital position and robust top-line performance will boost results over the long haul, sluggish economic recovery, regulatory issues and escalating expenses raise concerns.
Stifel Financial Corporation Price, Consensus and EPS Surprise
Stifel Financial Corporation Price, Consensus and EPS Surprise | Stifel Financial Corporation Quote
Currently, Stifel Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Brokerage Firms
E*TRADE Financial delivered a positive earnings surprise of 16% in the January-March quarter. Earnings of $1.09 per share comfortably surpassed the Zacks Consensus Estimate of 94 cents. Moreover, the results compared favorably with 88 cents recorded in the prior-year quarter.
Charles Schwab’s (SCHW - Free Report) first-quarter 2019 earnings of 69 cents per share surpassed the Zacks Consensus Estimate of 66 cents. Also, earnings increased 25% from the prior-year quarter. Revenue growth (driven by a rise in interest income) and an increase in total client assets aided the results. However, higher expenses and lower trading revenues acted as headwinds.
TD Ameritrade Holding Corporation (AMTD - Free Report) reported second-quarter fiscal 2019 (ending Mar 31) earnings of 93 cents per share, in line with the Zacks Consensus Estimate. The figure jumped 27% from the prior-year quarter.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>