BOK Financial Corporation BOKF has been growing inorganically backed by its strong capital position. Its diverse revenue mix and favorable geographic footprint will also likely support growth in the upcoming quarters. The company's continued expansion into selected markets in neighboring states instead of acquisitions is also expected to aid top-line growth.
Further, a positive trend in estimate revisions reflects optimism over the company’s earnings growth prospects. The Zacks Consensus Estimate for BOK Financial’s current-quarter earnings has moved up one cent per share over the last 60 days. Also, the current year’s earnings estimates have increased nearly 1%. As a result, the stock currently carries a Zacks Rank #2 (Buy).
Shares of BOK Financial have rallied 12.9% in the past six months, substantially outperforming the industry’s growth of 5.4%.
What Makes BOK Financial a Solid Pick?
Revenue Growth: Organic growth remains strong at BOK Financial. Revenues witnessed a compound annual growth rate of 5.4% over the last three years (2014-2016). Further, the top line is expected to increase 6.8% in 2017 compared with no growth for the industry.
Strong Inorganic Growth: BOK Financial has grown significantly over the years through several strategic acquisitions that transformed it from merely being a bank in Oklahoma to a chief financial service provider. In 2016, the company acquired Spectrum Advisors, a Dallas-based energy investment banking firm, Weaver Wealth Management, an asset management firm, and Kansas City, MI-based MBT Bancshares. The deals are expected to be accretive in the upcoming quarters.
Earnings Strength: While BOK Financial recorded a negative earnings growth rate of 5.6% over the last three to five years compared with positive growth of 5.6% for the industry it belongs to, the company’s earnings growth rate for the current year is anticipated to be 52.6%. This drastic improvement is perhaps majorly attributable to the acquisitions made by the company last year.
Also, the long-term (three-five years) expected EPS growth of 8% promises rewards for its shareholders. The company also has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in three of the trailing four quarters. It delivered an average positive surprise of 4.1% for this period. It also has a Growth 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.
Stock Looks Undervalued: 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.
In fact, the stock looks undervalued in terms of price-to-earnings and price-to-book ratios. The company’s P/E and P/B ratios of 15.76 and 1.61 are below the industry averages of 18.90 and 1.64, respectively.
Some better-ranked stocks from the finance space are People’s Utah Bancorp PUB, Carolina Financial Corporation CARO and BancFirst Corporation BANF, each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
People’s Utah Bancorp has witnessed an upward earnings estimate revision of 2.9% for the current year, in the last 60 days. Its share price has increased 47.7% in the past 12 months.
Shares of Carolina Financial Corporation have gained 55.7% in a year. The Zacks Consensus Estimate for current-year earnings has been revised 4.3% upward over the last 60 days.
BancFirst Corporation has witnessed 1.1% upward earnings estimate revision for the current year, in the past 60 days. Moreover, its shares have gained 49.1% over the past 12 months.
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Carolina Financial Corporation (CARO) : Free Stock Analysis Report
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BancFirst Corporation (BANF) : Free Stock Analysis Report
People's Utah Bancorp (PUB) : Free Stock Analysis Report
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