On Jul 13, 2013, Zacks Investment Research upgraded Rockville Financial Inc. (RCKB) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The company’s first-quarter 2013 earnings of 17 cents per share rose 31% from the year-ago number of 13 cents and surpassed the Zacks Consensus Estimate of 14 cents. With a long-term expected earnings growth rate of 10.00% and an average earnings surprise of 9.16% over the last four quarters, Rockville Financial offers an attractive investment proposition.
Solid first-quarter 2013 earnings were driven by improvement in residential mortgage, impressive loan growth, cost containment as well as enhanced asset quality.
Effective Capital Deployment Activities
On May 6, 2013, Rockville Financial paid an annual cash dividend of 10 cents per share to shareholders of record as of Apr 29, 2013. Moreover, the company repurchased 181,343 shares during first-quarter 2013 at $12.83 per share. Overall, Rockville Financial returned 113% of its net income to shareholders through dividend payouts and share repurchases during the quarter.
CEO William H. W. Crawford describes the company’s future to be “full of optimism and prudent growth.” Exemplifying his words, the 155-year old bank’s consistent growth over time makes it a sound choice for yield-seeking investors.
Following first-quarter earnings release, the Zacks Consensus Estimate for 2013 increased 1.6% to 62 cents per share. For 2014, the Zacks Consensus Estimate advanced 3.0% to 68 cents per share over the same time period. Strong estimate revision helped Rockville achieve a Zacks Rank #1 (Strong Buy) status.
Rockville Financial is scheduled to report second-quarter 2013 earnings on Jul 25, 2013. The Zacks Consensus Estimate for the quarter is 15 cents.
Other Stocks to Consider
Other banks that are also worth a look include Center Bancorp Inc. (CNBC), S&T Bancorp Inc. (STBA) and Boston Private Financial Holdings, Inc. (BPFH). While Center Bancorp and S&T Bancorp carry a Zacks Rank #1(Strong Buy), Boston Private Financial Holdings has a Zacks Rank #2 (Buy).
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