Northwest Bancshares, Inc. NWBI is well poised for top-line growth, driven by continued rise in demand for consumer loans. Also, the company’s inorganic initiatives are commendable. Thus, it seems to be a wise idea to add the stock to your portfolio now.
The stock has been witnessing upward estimate revisions, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for earnings has been revised 4.8% and 1.9% upward for 2019 and 2020, respectively. It currently carries a Zacks Rank #2 (Buy).
The stock has rallied 2.5% over the past three months, underperforming the industry’s growth of 4.9%.
Here are a few other factors that make Northwest Bancshares an attractive investment option now.
Revenue strength: Driven by improving loan receivables and deposit balances, Northwest Bancshares’s revenues increased at a five-year CAGR of 5.6% (2014-2018). Also, the company’s efforts to expand footprint through strategic acquisitions are likely to support the top line. In October, it entered into an agreement to buy Indiana-based MutualFirst Financial Inc. , while in March the bank acquired Pennsylvania-based Donegal Financial Services Corporation. Moreover, its projected sales growth rate of 6.5% for 2019 and 14% for 2020 indicates continuation of the momentum.
Earnings growth: Northwest Bancshares witnessed earnings growth of 10.6% over the past three-five years. Moreover, this uptrend is likely to continue in the near term as reflected by its projected earnings growth rate of 6.9% for 2019.
Also, the company delivered an average positive earnings surprise of 2.3% over the trailing four quarters.
Impressive capital deployment: Northwest Bancshares is actively involved in capital deployment activities. Since 2015, it has been increasing quarterly dividend annually, with the latest hike announced in January. Driven by a strong liquidity position and consistently improving earnings, the capital deployments look sustainable.
Strong leverage: Northwest Bancshares’s debt/equity ratio is 0.28 compared with the industry’s 0.56. This shows that the company will be financially stable, even in adverse economic conditions.
Other Key Picks
Northfield Bancorp, Inc. NFBK has witnessed 7.8% upward earnings estimate revisions for 2019 in the past 60 days. Moreover, this Zacks #1 (Strong Buy) Ranked stock has rallied 23.4% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors Bancorp, Inc.’s ISBC ongoing-year earnings estimates have moved 4.1% north in 60 days’ time. Additionally, the stock has rallied 13.3% so far this year. It carries a Zacks Rank #2.
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