Amid the coronavirus pandemic, it seems to be a wise idea to add New York Community Bancorp, Inc. (NYCB - Free Report) stock to your portfolio now, given the strength in its fundamentals and solid growth prospects. Also, its revenue and earnings projections, along with cost management, are impressive.
The company has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for 2020 and 2021 earnings has displayed an upward trend.
This Zacks Rank #2 (Buy) stock has depreciated 24.3%, in the past six months, compared with the industry’s decline of 34.6%.
Why is New York Community a Golden Egg?
Revenue Strength: Though the company has witnessed a fall in net revenues over the last three years, total revenues are projected to grow at a rate of 9.2% in 2020 (compared with the nil industry average). This upward trend will likely be supported by a decent lending scenario and New York Community’s efforts to boost its fee income.
Earnings per Share Growth: New York Community’s earnings for 2020 are projected to increase 6.5%. This earnings momentum is likely to continue in the near term, as reflected by the company’s impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters and met in the others.
The company has a Momentum Score of B. Our research shows that stocks with the combination of a Style Score of A or B, and a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Prudent Expense Management: New York Community’s declining expense base is a tailwind. Non-interest expenses have witnessed a negative CAGR of 9.6% over the last five years (ended 2019), with the trend continuing in first-quarter 2020 as well. Notably, in the first quarter of 2019, it entered into an agreement with Fiserv, a global leader in financial services technology solutions, whereby the latter will provide a new enterprise-wide banking platform, which is anticipated to result in substantial cost savings and efficiencies in 2020.
Stock Looks Undervalued: New York Community looks undervalued, with respect to price/earnings (P/E) (F1) and PEG ratios. It has a P/E (F1) ratio of 11.21, which is below the industry average of 11.52. Also, its PEG ratio of 1.12 is lower than the industry average of 1.73.
Additionally, 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.
Other Stocks to Consider
Tradeweb Markets Inc (TW - Free Report) has witnessed upward earnings estimate revisions for 2020 over the past 30 days. Moreover, this Zacks #1 Ranked stock has gained 36.1% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
GAIN Capital Holdings, Inc. (GCAP - Free Report) current-year earnings estimate moved north in 30 days’ time. Further, the company’s shares have appreciated 53.4% over the past six months. At present, it sports a Zacks Rank of 1.
Mackinac Financial Corporation (MFNC - Free Report) has witnessed upward earnings estimate revision for the ongoing year in the past 30 days. This Zacks #2 Ranked stock has depreciated 41.6% over the past six months.
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