5 Reasons to Include UMB Financial (UMBF) in Your Portfolio
UMB Financial Corporation UMBF appears to be a promising bet now given its solid organic growth and robust fundamentals. Also, its earnings growth prospects are impressive. Further, UMB Financial remains committed to driving operating efficiency through several initiatives.
Moreover, it has been successful in gaining analysts’ confidence. Over the past 30 days, the Zacks Consensus Estimate for its 2020 and 2021 earnings moved upward by 33.3% and 16.4%, respectively. As a result, the stock flaunts a Zacks Rank #1 (Strong Buy).
Shares of UMB Financial have gained 48.4% over the past six months compared with industry’s growth of 31.9%.
What Makes the Stock Attractive?
Revenue Strength: UMB Financial has an impressive revenue growth story. Its top line witnessed a CAGR of 12.7% over the last five years (2015-2019) on the back of rising interest income and fee income growth. Also, its projected sales growth rate of 8.5% for 2020 ensures continuation of the uptrend in revenues.
Earnings Per Share (EPS) Growth: UMB Financial witnessed earnings growth of 11.2% in the last three to five years. While earnings are projected to decline 11% in 2020, the trend will likely reverse after that. In 2021, earnings are expected to grow nearly 1%.
Further, the company’s long-term (three to five years) estimated EPS growth rate of 4.5% promises rewards for investors.
Impressive Balance Sheet Growth: UMB Financial’s loans and deposits have witnessed a CAGR of 10.9% and 8.2%, respectively, over a five-year period (ended 2019). Though loan demand has been soft due to pandemic concerns, the same is expected to improve once the economy recovers and business activities resume in full swing.
Strong Leverage: UMB Financial’s debt/equity ratio is 0.09 compared with the industry average of 0.36. The relatively strong financial health of the company will help it perform better than its peers in a dynamic business environment.
Steady Capital Deployment Activities: In October 2020, the board of directors hiked quarterly dividend by 3.2%. Also, in April, the company announced a share repurchase authorization of up to 2 million shares. Moreover, its debt/equity ratio and dividend-payout ratio compare favorably with that of the broader industry, reflecting the fact that such dividend hikes are sustainable.
Other Stocks to Consider
Commerce Bancshares, Inc. CBSH has witnessed 6.3% upward estimate revision over the past 30 days. The company’s shares have risen nearly 15% in the past six months. It has a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Second Bancorp, Inc. OSBC shares have rallied 38.8% in six months’ time. Further, the company’s earnings estimates for the ongoing year have moved 24.7% north in the past 30 days. The stock currently flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for the current year for Independent Bank Corporation IBCP, carrying a Zacks Rank #1, has been revised 32.4% upward in the past 30 days. The company’s share price has jumped 28.3% in the past six months.
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