It seems to be a wise idea to add Riverview Bancorp Inc RVSB stock to your portfolio now, given its strong fundamentals and promising prospects. Solid loans receivable balance and steady growth in non-interest income are likely to continue supporting the company’s profitability.
The stock has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for fiscal 2020 and fiscal 2021 has moved 2.7% and 1.3% north, respectively.
The Zacks Rank #2 (Buy) stock has rallied 1.8% so far this year, underperforming the industry’s growth of 22.2%.
Here are a few factors that make Riverview Bancorp an attractive investment option.
Revenue growth: Organic growth remains a key strength for Riverview Bancorp. The top line witnessed a five-year CAGR of 12.9% (fiscal 2015-2019). Steady increase in demand for commercial and construction loans along with rising fees and service charges, and asset management fees will continue supporting revenue growth.
Moreover, in 2017, the company had acquired certain assets and liabilities of Merchants Bancorp MBIN and its wholly owned subsidiary, MBank, which boosted its loan and deposit balances. The deal also expanded its market presence in Oregon. Further, its projected sales growth rate of 2.1% and 4.4% for fiscal 2020 and fiscal 2021, respectively, indicate continuation of the momentum.
Earnings strength: Over the past three to five years, earnings of Riverview Bancorp witnessed 36.4% growth. This uptrend is anticipated to continue as the company’s earnings are projected to be up 1.3% and 3.9% in fiscal 2020 and fiscal 2021, respectively.
Also, Riverview Bancorp has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.1%.
Impressive capital deployment: Riverview Bancorp is actively involved in capital-deployment activities. Since 2017, the company has been increasing its dividends semi annually, with the latest hike announced in July. Driven by a strong liquidity position and consistently improving earnings, the capital deployments look sustainable.
Strong leverage: Riverview Bancorp’s debt/equity ratio is 0.20 compared with the industry’s average debt/equity ratio of 0.56. This reflects that the company will be financially stable, even during adverse economic situations.
Superior Return on Equity (ROE): Riverview Bancorp’s ROE of 12.76% compares favorably with the industry average of 8.85%. This highlights the company’s commendable position over its peers in using shareholders’ funds.
Stock seems undervalued: The company looks undervalued, with respect to its price/earnings (P/E) (F1) and price/book (P/B) ratios. It has a P/E (F1) ratio of 9.62, which is below the industry average of 13.45. Also, its P/B ratio of 1.18 is lower than the industry average of 1.20.
Additionally, the stock has a Value Score of A. 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.
Other Key Picks
Northfield Bancorp, Inc. NFBK has witnessed 7.8% upward earnings estimate revision for 2019 in the past 60 days. Moreover, this Zacks #1 (Strong Buy) Ranked stock has rallied 24.3% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
First Defiance Financial Corp.’s FDEF current-year earnings estimates have moved 4.6% north in the past 60 days. Further, the company’s shares have gained 21.5% in the year-to-date period. At present, it carries a Zacks Rank of 2.
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First Defiance Financial Corp. (FDEF) : Free Stock Analysis Report
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Riverview Bancorp Inc (RVSB) : Free Stock Analysis Report
Merchants Bancorp (MBIN) : Free Stock Analysis Report
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