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Based on its underlying strength and good growth prospects, Popular, Inc. BPOP stock seems to be a solid bet now. Moreover, the company has been witnessing positive estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.3% upward over the past 30 days. Thus, the stock currently carries a Zacks Rank #2 (Buy).
The company’s price performance also looks impressive. The stock has gained 65.4% in the past year, outperforming 3.7% growth recorded by the industry it belongs to. Moreover, Popular has a Momentum Score of B. Our research shows that stocks with a Style Score of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Here are a few other factors that make the stock a viable investment option.
Earnings per Share (EPS) Growth: In the last three-five years, Popular witnessed EPS growth of 3.1%. This earnings momentum is likely to continue in the near term, as reflected by the company’s projected EPS growth of nearly 82.8% and 20.5% for 2018, and 2019, respectively.
Moreover, the company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average beat being 23.3%.
Revenue Strength: Popular’s revenues have witnessed a CAGR of 2% over the past four years (2014-2017). Moreover, the company’s projected sales growth of 18.3% for 2018 (higher than the industry average of 5.2%) ensures the continuation of the uptrend in revenues.
Strong Leverage: Popular’s debt/equity ratio, which stands at 0.00, indicates that the company uses no debt to finance its operations. On the other hand, the industry’s debt/equity ratio stands at 0.24. This reflects the company’s financial stability, even in adverse economic conditions.
Stock Looks Undervalued: Popular stock looks undervalued, with respect to its price-to-earnings (P/E) and price-to-book (P/B) ratios. It has a P/E (F1) ratio of nearly 11.0 compared with the industry average of 13.2. Moreover, the company’s P/B ratio of 1.1 is slightly below the industry average of 1.3.
Further, the stock has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Other Stocks Worth a Look
A few other top-ranked stocks from the same space are Community Trust Bancorp, Inc. CTBI, Origin Bancorp, Inc. OBNK and Reliant Bancorp, Inc. RBNC. Each of these currently has a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, Community Trust has witnessed an upward earnings estimate revision of 1.6% for the current year. Its share price has increased 1% in the past year.
Origin Bancorp’s Zacks Consensus Estimate for the current year has been revised marginally upward over the past 60 days. Its shares have gained nearly 1.7% in the past 12 months.
Over the past 60 days, Reliant Bancorp has witnessed an upward earnings estimate revision of 2.1% for the current year. Its share price has increased nearly 1% in a year’s time.
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Popular, Inc. (BPOP) : Free Stock Analysis Report
Community Trust Bancorp, Inc. (CTBI) : Free Stock Analysis Report
Origin Bancorp, Inc. (OBNK) : Free Stock Analysis Report
Reliant Bancorp, Inc. (RBNC) : Free Stock Analysis Report
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