All posts from Zacks
Zacks in Our Research. Your Success.,

4 Banking Stocks That Are Projected To Surge

Investors constantly attempt to discover which industry or sector holds the most potential for capital gains. The banking industry is known its long-term stability, but not necessarily its growth prospects.

However, the Federal Reserve is expected to continue raising the benchmark interest rate into the future. Rising interest rates could possibly allow for banks to their boost earnings due to larger interest payments on their outstanding loans to businesses and individuals. This means that the banking industry is once again in the spotlight.

Fortunately, we can utilize the Zacks Stock Screener to search for bank stocks that possess a positive outlook in the ever-changing banking industry. As the Federal Reserve continues to shape the future economic landscape, interest rates are projected to continue increasing, which could positively affect shareholders of banking stocks.

Check out 4 banking stocks that are projected to surge now:

1.       First Financial Corporation Indiana THFF

First Financial Corporation is a regional multi-bank holding company including Terre Haute First National Bank, First State Bank, First National Bank of Marshall, First Crawford State Bank, and more. First Financial Corporation has surpassed our earnings projections in each of its past five operational quarters by an average of 8.37%. The company sports “B” grades for Value and Growth, which means that the company could be viewed as undervalued while exhibiting excellent growth opportunities. Also, the bank rewards its shareholders with a strong 2.09% dividend.

First Financial Corporation holds an EV/EBITDA of 7.72 and current cash flow growth of 21.87%, both of which compare favorably to their industry averages of 10.34 and 14.38%, respectively. Additionally, the bank possesses a net margin of 23.42%, which also beats the industry average. This means that First Financial Corporation is retaining a larger amount of profit than its competitors. Basically, this trait could be advantageous if interest rates continue to rise and the bank is subject to increased earnings. First Financial Corporation currently holds a Zacks Rank #2 (Buy).

2.       Wintrust Financial Corporation WTFC

Wintrust Financial is a bank holding company that currently possesses “B” grades for Value and Momentum. Basically, it is our belief that this stock could be undervalued despite its recent gains. In fact, the company’s share price has increased by a whopping 57.20% over the past year. Additionally, Wintrust Financial has been assigned a beta rating of 0.81, which means that this stock is considered less volatile than a typical security.

Wintrust Financial holds a cash flow per share of $5.12, which towers over the industry average of $2.20. Currently, firm is utilizing shareholder equity much more efficiently than its competitors. Further, the bank’s projected sales growth of 6.91% beats the industry average of 2.62%. Wintrust Financial is showing positive growth potential at a time when its earnings could possibly increase due to interest rate hikes. Now might be the perfect time to invest in Wintrust Financial Corporation, which was recently promoted to a Zacks Rank #2 (Buy).

3.       Comerica Incorporated CMA

Comerica Incorporated is a bank holding company formed by its three major business lines: Business Bank, Individual Bank, and Investment Bank. Comerica shares have increased 82.9% over the past year, significantly outperforming the 42% growth rate in the Zacks Regional Banks-Major industry. Comerica is currently expected to repurchase up to $440 million worth of outstanding shares and also increased its common stock dividend by 13% earlier in 2017.

Comerica Incorporated holds “B” grades for Growth and Momentum, which means that the stock is considered undervalued while its share price has continued to increase. However, Comerica’s share price hasn’t only increased; it has skyrocketed upward by 86.96% over the past year. Comerica’s projected EPS growth sits at an impressive 51.51%, which demolishes the industry average of 11.50%. Overall, Comerica Incorporated holds a Zacks Rank #2 (Buy).

4.       MB Financial Inc. MBFI

MB Financial is a bank holding company which conducts a commercial banking business through Manufacturers Bank. MB Financial holds a “B” VGM grade,  while its industry currently sits in the top 35% on the Zacks Industry Rank. Further, the company has beaten its projected earnings estimates in five out of its last six operational quarters. MB Financial also sports an excellent debt/equity ratio of 0.21. Basically, the bank is financing its projects with a minimal amount of debt, which means that the company is responsible for a smaller amount of liabilities on its balance sheet.

MB Financial holds a respectable earnings yield of 5.90%. In essence, investors are earning $5.90 for every $1 of investment in MB Financial. Finally, the company currently possesses an excellent Price/Cash Flow ratio of 5.87, which means that the bank provides strong value on the equity securities market. MB Financial was recently promoted to a Zacks Rank #2 (Buy).

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

 And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Comerica Incorporated (CMA): Free Stock Analysis Report
Wintrust Financial Corporation (WTFC): Free Stock Analysis Report
First Financial Corporation Indiana (THFF): Free Stock Analysis Report
MB Financial Inc. (MBFI): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research