LPL Financial Holdings Inc. LPLA looks like an attractive investment option right now, given its strong fundamentals and good growth prospects. The company has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential.
Its Zacks Consensus Estimate for earnings in 2019 has been revised 8% upward over the past 30 days. Thus, the stock currently carries a Zacks Rank #2 (Buy).
The company’s price performance also looks impressive. Its shares have rallied 20.5% over the past year against the industry’s decline of 18.7%. Moreover, LPL Financial has a Momentum Score of A. 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.
LPL Financial has a number of other aspects that make it a solid pick right now.
Earnings per Share (EPS) Strength: LPL Financial witnessed 13.6% growth in earnings per share over the last three to five years. This momentum is expected to continue in the near term as evident from its projected EPS growth rate of 21.2% and 9.8% for 2019, and 2020, respectively.
Further, the company’s long-term (three to five years) expected EPS growth rate of 15% promises rewards for shareholders.
Revenue Growth: LPL Financial’s revenues witnessed a CAGR of 4.6% over the last six years (2013-2018). Further, the top line is expected to increase 2.8% in 2019, higher than the industry average of 0.2%.
Superior Return on Equity (ROE): LPL Financial has an ROE of 46.29%, which is far better than the industry average of 12.72%. This shows that the company reinvests cash more efficiently than its peers.
Stock Looks Undervalued: If we compare the company’s price-to-earnings (P/E) and PEG ratios with the respective industry averages, the stock appears undervalued. Its P/E (F1) and PEG ratios are 11.9 and 0.8, below the respective industry averages of 12.9 and 1.1.
Other Key Picks
Some other top-ranked stocks from the finance space are Enterprise Financial Services Corp EFSC, Evercore Inc. EVR and Stifel Financial Corp. SF.
Over the past 30 days, Enterprise Financial has witnessed an upward earnings estimate revision of 3.4% for 2019. Its share price has increased 3.7% over the past three months. The stock currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evercore currently carries a Zacks Rank of 2. It has witnessed an upward earnings estimate revision of 5% for the current year over the past 30 days. Its shares have gained 17.2% in the past three months.
Stifel Financial presently has a Zacks Rank #2. Its earnings estimates have been revised upward by nearly 6.9% over the past 30 days. Its shares have rallied 13.8% in the past three months.
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Enterprise Financial Services Corporation (EFSC) : Free Stock Analysis Report
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