Here Are 5 Reasons to Bet on Orange County (OBT) Right Now
Orange County Bancorp, Inc. OBT appears to be a solid bet, driven by its earnings and revenue growth. Further, its decent liquidity position helps to sustain steady capital distribution.
The Zacks Consensus Estimate for OBT's 2023 and 2024 earnings has been revised 10% and 12.7% upward, respectively, over the past month. This shows that analysts are optimistic regarding the company’s earnings prospects. OBT currently carries a Zacks Rank #2 (Buy).
Over the past three months, the stock has gained 24.8% compared with the industry's growth of 0.9%.
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Mentioned below are a few factors that make OBT stock a solid pick now:
Earnings Growth: OBT’s earnings per share witnessed a compound annual growth rate (CAGR) of 20.06% over the three-year period ended 2022. This momentum in earnings is expected to continue in the near term. The company’s earnings are projected to rise 21.7% in 2023.
OBT has a solid earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.12%.
Revenue Strength: OBT’s revenues witnessed a CAGR of 18.7% over the three-year period ended 2022. The improvement was driven by solid loan balance and efforts to bolster fee income. Also, since 2022, higher interest rates have aided OBT’s top line.
Given the decent loan demand and a rise in fee income, revenues will likely trend upward. The top line is expected to grow 8.9% in 2023.
Decent Capital Distribution Activities: Orange County has been paying out quarterly dividends regularly, with the latest hike of 15% to 23 cents per share announced in November 2022. Recently, on Aug 17, the company announced a cash dividend of 23 cents per share. The dividend was paid out on Sep 15, 2023, to shareholders of record as of Sep 4.
Superior Return on Equity (ROE): The company has a trailing 12-month ROE of 23.25%, which compares favorably with 11.77% of the industry. This reflects that it is more efficient in using shareholders’ funds than its peers.
Favorable Valuation: OBT stock has a Value Score of B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Bank Stocks Worth a Look
A couple of other top-ranked stocks from the banking space are The Bancorp TBBK and Northeast Community Bancorp NECB.
The Zacks Consensus Estimate for The Bancorp's current-year earnings has been revised 1.4% upward over the past 60 days. Its shares have gained 7.1% in the past three months. Currently, TBBK carries a Zacks Rank #2.
Northeast Community sports a Zacks Rank #1 at present. Earnings estimate for 2023 has been revised 10% upward over the past 60 days. In the past three months, NECB shares have rallied 6.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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The Bancorp, Inc. (TBBK) : Free Stock Analysis Report
Northeast Community Bancorp Inc. (NECB) : Free Stock Analysis Report
Orange County Bancorp, Inc. (OBT) : Free Stock Analysis Report
