Commerce Bancshares, Inc. CBSH offers a profitable investment opportunity, driven by improving economy, steady earnings growth and a strong liquidity position. Further, improving loans and deposits, lower tax rates and easing of banking regulations will support profitability.
Analysts also seem to be optimistic about its growth prospects as evident from the upward estimate revisions. Over the last 60 days, the Zacks Consensus Estimate for the current-year earnings has moved slightly upward. Also, earnings estimate for 2020 moved nearly 1% north during the same time period.
Further, this Zacks Rank #2 (Buy) stock has rallied 5.3% in the past year, against the industry’s decline of 7.6%.
What Makes the Stock an Attractive Pick?
Earnings Growth: Commerce Bancshares recorded 10.7% earnings growth, over the last three-five years. This momentum is likely to continue in the near term as well, as reflected by the company’s projected earnings per share (EPS) growth of 1.1% and 3.3% for 2019 and 2020, respectively.
Moreover, Commerce Bancshares has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, average beat being 8.9%.
Also, the company’s long-term (three-five years) estimated EPS growth rate of 4.4% promises rewards for investors.
Revenue Growth: Commerce Bancshares’ improving loan and deposit balances, along with higher rates, will support revenue growth. The company’s revenues witnessed a CAGR of 6%, over the last five years (2014-2018). This uptrend is expected to continue in the days ahead. The top line will likely be up 3.7% in 2019 and 3.3% in 2020.
Superior ROE: Commerce Bancshares’s trailing 12-month return on equity (ROE) reflects its superiority, in terms of utilizing shareholders’ fund. The company’s ROE of 16.29% compares favorably with the industry’s 11.13%.
Leverage: Commerce Bancshares’ debt/equity ratio is nil versus the industry average of 0.40, indicating a relatively lower debt burden.
Other Key Picks
Civista Bancshares’ CIVB shares have rallied 19.4%, over the past three months. Further, the company’s ongoing year’s earnings estimates moved up 4.6%, over the past 60 days. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Eagle Bancorp Montana, Inc’s EBMT shares have appreciated 3.1%, in the past three months’ time. Moreover, the company’s earnings estimates for 2019 have been revised 6.5% upward, over the past 60 days. At present, the stock flaunts a Zacks Rank of 1.
First Financial Bancorp’s FFBC shares have gained 1.6% in three month’s time. Also, the company’s current-year earnings estimates moved 1% upward, in 60 days’ time. Currently, it carries a Zacks Rank of 2.
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Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
Eagle Bancorp Montana, Inc. (EBMT) : Free Stock Analysis Report
First Financial Bancorp. (FFBC) : Free Stock Analysis Report
Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report
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