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Here's Why The Bancorp (TBBK) Stock is Worth Betting On Now

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Underlying strength and healthy long-term prospects make Wilmington, DE-based The Bancorp, Inc. (TBBK - Free Report) a solid bet now. Also, decent loan demand and a strong balance sheet position bode well for the future.

Further, analysts are bullish on the stock. The Zacks Consensus Estimate for the bottom line has moved 3.5% and 4.6% upward over the past 60 days for 2020 and 2021, respectively. Currently, the stock sports a Zacks Rank #1 (Strong Buy).

Shares of The Bancorp have gained 9.4% over the past year against the industry’s 26.6% fall.



Here are the factors that make it a solid investment pick right now:

Earnings Strength: Over the last three to five years, The Bancorp has recorded earnings growth of 26.6%. The momentum is expected to continue in the near term. The bank’s earnings are projected to grow at a rate of 10.4% and 16.7% for 2020 and 2021, respectively.

Revenue Growth: The Bancorp’s net revenues have witnessed a CAGR of 4.9% over the last five years (2015-2019). This top-line improvement was backed by strong loan and deposit balance, along with diversified fee income sources. The trend is likely to persist for the next couple of years, with revenues expected to grow 10.4% in 2020 and 16.7% in 2021.

Superior ROE: The Bancorp’s t trailing 12-month return on equity (ROE) highlights its growth potential. The company's ROE of 11.76% compares unfavorably with 8.79% for the industry, underlining that it is more efficient in using shareholder funds than peers.

Strong Leverage: The Bancorp’s debt/equity ratio of 0.11 compares favorably with the industry average of 0.40, thereby reflecting the company’s relatively strong financial health. Thus, we believe that it will perform better than peers in an unstable business environment.

Stock Seems Undervalued: The Bancorp has a Value Score of A. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.

Also, the company’s price/earnings and price/sales ratio are lower than their respective industry averages.

Other Stocks to Consider

West Bancorporation’s (WTBA - Free Report) earnings estimates for 2020 have moved up 13.9% over the past 60 days. The company’s shares have gained 13.9% over the past three months. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Affiliated Managers Group’s (AMG - Free Report) earnings estimates for the current year have moved 2.6% upward over the past 60 days. The stock has appreciated 66.6% over the past three months. The company currently carries a Zacks Rank #2.

GAIN Capital Holdings’ earnings estimates for 2020 have increased significantly over the past 60 days. Further, the company’s shares have gained 28.3% over the past three months. At present, it has a Zacks Rank #2.

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