Despite the continued uncertainties related to the pandemic, it seems to be a wise idea to add Flagstar Bancorp, Inc. FBC stock to your portfolio now. The company’s fundamental strength, and decent sales and earnings growth projections make it a good investment option.
Of late, earnings estimates for the stock have been witnessing upward revisions, reflecting analysts’ optimism regarding its growth potential. Over the past 60 days, the Zacks Consensus Estimate for 2020 earnings has moved 62.1% north. The company currently sports a Zacks Rank #1 (Strong Buy).
Its price performance also seems encouraging. The stock has gained 3.8% over the past six months against the industry’s decline of 6.2%.
Mentioned below are the factors that make Flagstar Bancorp a solid pick right now.
Revenue Strength: Organic growth remains a key strength for the company. Flagstar Bancorp’s revenues witnessed a CAGR of 11.5% over the last five years (2015-2019). The top line is expected to grow steadily in the near term as is evident from its projected sales growth rate of 52.6% for 2020.
Earnings Growth: The company has an impressive earnings surprise history. Its bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.6%.
Moreover, over the last three-five years, the company’s earnings witnessed growth of 14.4%, higher than the industry average of 12.5%. This upswing in earnings is expected to continue in the near term as well. In 2020, earnings are projected to grow more than 80% (against the industry’s decline of 19.3%).
Superior Return on Equity (ROE): The company currently has an ROE of 15.43%, higher than the industry average of 7.43%. This reflects that it is more efficient than its peers in utilizing its shareholders’ funds.
Favorable Valuation: Flagstar Bancorp currently looks undervalued when compared with industry peers. It has a price/earnings (F1) ratio of 4.98, below the industry average of 12.29. Also, its price/sales ratio of 1.05 is lower than the industry’s 1.95.
Other Stocks Worth a Look
A few other top-ranked stocks from the finance space are mentioned below.
ETRADE Financial Corporation ETFC has witnessed an upward earnings estimate revision of 19% for the current year over the past 60 days. Its share price has increased 5.4% over the past three months. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s AMTD current fiscal-year earnings has been revised 18.9% upward over the past 60 days. Its share price has decreased 13.3% over the past three months. The company currently flaunts a Zacks Rank of 1.
Interactive Brokers IBKR has witnessed an northward earnings estimate revision of 29.7% for the current year over the past 60 days. Its share price has rallied 15.2% over the past three months. It currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
ETRADE Financial Corporation (ETFC) : Free Stock Analysis Report
TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
Flagstar Bancorp, Inc. (FBC) : Free Stock Analysis Report
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