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5 Reasons to Invest in FB Financial (FBK) Stock Right Now

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Despite the continued uncertainties related to the pandemic, it seems to be a wise idea to add FB Financial Corporation FBK stock to your portfolio now. The company’s fundamental strength and decent sales growth projections make it a good investment option.

Notably, of late, earnings estimates for the company have been witnessing upward revisions, reflecting analysts’ optimism regarding its growth potential. Over the past 30 days, the Zacks Consensus Estimate for FB Financial’s 2020 earnings has been revised 34.2% upward. Thus, the company currently carries a Zacks Rank #2 (Buy).

Its price performance also seems impressive. The stock has gained 22.9% over the past three months compared with the industry’s growth of 4.5%.

Mentioned below are the factors that make FB Financial a solid pick right now.

Earnings Growth: In the last three-five years, the company’s earnings witnessed a CAGR of 8.9%. While earnings are projected to decline 30.7% in 2020, (primarily because of the coronavirus-induced crisis) the trend will likely reverse, going forward. For 2021, it has a projected earnings growth rate of 12.2%.

Also, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

Revenue Strength: FB Financial’s revenues witnessed a CAGR of 16.4% over the last four years (2016-2019). The top line is expected to continue to grow in the near term, as can be seen from its projected sales growth rate of 40.5% for 2020 and 2.3% for 2021.

Inorganic Growth Efforts: Supported by a strong balance sheet position, FB Financial has been an active acquirer. Recently, it closed the merger deal with Franklin, TN-based Franklin Financial Network, which is expected to be accretive to earnings. In February 2020, the company completed the deal to acquire FNB Financial Corp. and its wholly-owned subsidiary, The Farmers National Bank of Scottsville. Earlier in 2017, it acquired Tennessee-based Clayton Bank and Trust, and American City Bank from Clayton HC, Inc. These deals have been supporting FB Financial’s profitability.

Strong Leverage: Currently, FB Financial’s debt/equity ratio of 0.04 is below the industry’s 0.36. This shows that the company will be financially stable, even in adverse economic conditions.

Superior Return on Equity (ROE): The company currently has an ROE of 9.80%, higher than the industry average of 8.43%. This reflects that it is more efficient than peers in using shareholder funds.

Other Stocks Worth a Look

A few other top-ranked stocks from the finance space are mentioned below.

ETRADE Financial Corporation ETFC witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has increased 28.8% over the past year. It currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s AMTD current fiscal-year earnings has been revised 21.7% upward over the past 60 days. Its share price has decreased 11.9% over the past 12 months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Interactive Brokers IBKR witnessed an upward earnings estimate revision of 26.9% for the current year over the past 60 days. Its share price has increased 12.3% over the past year. It currently carries a Zacks Rank #2.

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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
FB Financial Corporation (FBK) : Free Stock Analysis Report
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