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It seems to be a wise idea to invest in First Financial Bankshares FFIN stock right now. The company is well poised for revenue growth, driven by continued improvement in loans and deposits. Moreover, it has a solid balance sheet position.
Further, the company’s current-year earnings estimates have been revised 5% upward over the past 30 days. It currently carries a Zacks Rank #2 (Buy).
Moreover, the stock has been performing well. So far this year, shares of First Financial have rallied 45.7%, outperforming rise of 40.6% for the industry it belongs to.
What Makes First Financial a Solid Pick
Revenue Strength: First Financial has been witnessing consistent improvement in revenues, driven by growth in loans and deposit balances. Over the last five years (ended 2020), total revenues recorded a compound annual growth rate (CAGR) of 12.3%.
Moreover, backed by strong balance sheet and liquidity position, the company is expected to be able to undertake inorganic expansion moves. In 2020, it acquired TB&T Bancshares, Inc., which helped boost its non-interest revenues.
The company’s revenues are projected to grow 2.3% in 2021.
Earnings Growth: First Financial recorded earnings growth of 15.7% over the past three to five years. This momentum is likely to continue in the near term, as reflected by the company’s projected earnings growth rate of 4.2% for 2021.
Moreover, First Financial has a decent earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 18.59%.
Steady Capital Deployments: First Financial undertakes sustainable capital-deployment activities. In March 2020, the company announced a share-buyback plan of up to 4 million shares through September 2021. Also, in April 2021, the bank declared a dividend of 15 cents per share for the second quarter of 2021, which represents a 15.4% increase from previous payout.
Superior Return on Equity (ROE): First Financial has a ROE of 13.55% compared with the industry average of 9.94%. This indicates the company’s superiority in utilizing shareholders’ funds.
Strong Leverage: First Financial’s debt/equity ratio is nil against the industry average of 0.19. The relatively strong financial health of the company is likely to help it perform better than its peers in a dynamic business environment.
Other Stocks Worth Considering
Wells Fargo & Company WFC has witnessed a 43.1% upward estimate revision over the past 60 days. The company’s shares have rallied 51.5% so far this year. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
KeyCorp’s KEY shares have gained 39.5% so far this year. Further, the company’s earnings estimates for the ongoing year have moved 16.8% north in the past 60 days. It currently has a Zacks Rank of 2.
UMB Financial Corporation UMBF has witnessed 26.2% upward estimates revision for the current-year over the past 60 days. Shares of this Zacks #2 Ranked stock have gained 40.9% so far this year.
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Wells Fargo & Company (WFC) : Free Stock Analysis Report
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