Despite the coronavirus outbreak-induced economic uncertainty, Virtus Investment Partners, Inc. (VRTS - Free Report) stock looks like a good investment option now, given its strong fundamentals and promising prospects. Moreover, the company’s solid assets under management (AUM) balance will likely keep boosting revenues.
The Zacks Consensus Estimate for its current-year earnings has been revised 3.6% upward over the past 30 days. The company currently carries a Zacks Rank #2 (Buy).
Over the past three months, shares of Virtus Investment have gained 66.5% compared with the industry’s growth of 43.8%.
There are some other factors mentioned below that make Virtus Investment an attractive investment option now.
Earnings Strength: Over the last three to five years, the company witnessed earnings growth of 19.9%, higher than the industry average of 7%. While earnings are expected to decline 11.6% in 2020 due to the current economic slowdown and a tough operating backdrop, the same is projected to grow 3% in 2021.
Moreover, the company’s long-term (three-five years) projected earnings growth rate of 9.1% promises reward for investors.
Revenue Growth: Supported by a solid AUM balance, the company’s revenues witnessed a CAGR of 4.5% over the last six years (2014-2019). While the top line is projected to decline 11.1% in 2020, the same will likely witness growth of 10.5% in 2021.
Strong Leverage: Virtus Investment’s debt/equity ratio is nil against the industry’s average debt/equity ratio of 0.25. This reflects that the company will be financially stable even during adverse economic situations.
Superior Return on Equity (ROE): Virtus Investment’s ROE of 22.11% compares favorably with the industry average of 12.55%. This highlights the company’s commendable position over its peers in using shareholders’ funds.
Favorable Valuation: With respect to the PEG ratio as well as price/cash flow (P/CF) ratio, the company seems undervalued right now. Its PEG ratio is 0.96, lower than the industry average of 1.65. Moreover, its P/CF ratio of 4.72 compares favorably with the industry average of 8.28.
Other Key Picks
West Bancorporation’s (WTBA - Free Report) earnings estimates for the current year have moved up 13.9% over the past 60 days. The company’s shares have gained 7.4% over the past three months. At present, it sports a Zacks Rank #1 (Strong Buy). 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 51% over the past three months. The company currently carries a Zacks Rank #2.
GAIN Capital Holdings’ (GCAP - Free Report) earnings estimates for 2020 have been raised significantly over the past 60 days. The company’s shares have gained 16.9% over the past three months. At present, it has a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>