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It seems to be a wise idea to add Metropolitan Bank Holding Corp. MCB stock to your portfolio amid the coronavirus crisis, given the strength in its fundamentals and solid prospects.
Over the past 30 days, the Zacks Consensus Estimate for 2020 and 2021 earnings has moved 13.8% and 6.6% upward, respectively. The company currently sports a Zacks Rank #1 (Strong Buy).
Shares of Metropolitan Bank have lost 23.1% in the past 12 months compared with the industry's 26.6% fall.
Factors That Make Metropolitan Bank a Solid Pick Right Now
Earnings Growth: Metropolitan Bank has witnessed steady earnings growth, with a three-year CAGR of 15% (2017-2019). Further, the company is expected to register earnings growth of 20.8% for 2020 compared with the industry average, which is likely to see a fall of 22.9%.
Revenue Strength: Metropolitan Bank’s revenues have been witnessing a consistent growth, with a three-year CAGR of 22.7% (ended 2019). This uptick primarily resulted from the steady rise in net interest income.
Further, the company’s revenues are projected to grow at a rate of 27.3% in the current year compared with the industry, which is unlikely to record any growth. Moreover, the bank is expected to record 12.3% revenue growth in the next year.
Stock Looks Undervalued: Metropolitan Bank currently looks undervalued, with respect to the price/earnings (P/E) (F1) and price/sales (P/S) ratios. It has a P/E (F1) ratio of 7.25, which is below the industry average of 11.18. Also, the bank’s P/S ratio of 1.64 is lower than the industry average of 1.94.
Additionally, the stock currently has a Value Score of B. The Value 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.
Superior ROE: Metropolitan Bank’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 10.68% compares favorably with the industry’s 8.43%, indicating that it is more efficient in using shareholder funds than its peers.
Stocks to Consider
Mr. Cooper Group Inc. COOP witnessed an upward earnings estimate revision of 85.3% for 2020 over the past 30 days. Its shares have appreciated 79.2% over the past year. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSphere Investment Group Inc. BSIG witnessed an upward earnings estimate revision of 4.5% for the current year in the past 30 days. Its shares have gained 52.4% in a year’s time. It also currently flaunts a Zacks Rank of 1.
AllianceBernstein Holding L.P. AB has witnessed a marginal upward earnings estimate revision for the ongoing year in the past 30 days. Its shares have rallied 3.8% over the past year. Currently, it carries a Zacks Rank of 2 (Buy).
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