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6 Reasons Why Popular (BPOP) Stock is Worth Betting on Now

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Popular, Inc. BPOP seems to be a wise option to add in your portfolio at the moment. Impressive organic growth, strong fundamentals and capital strength are likely to drive the stock higher.

The company has been successful in gaining analysts’ confidence. Its current-year earnings estimates have been revised 10% upward over the past 60 days. As a result, the company currently sports a Zacks Rank #1 (Strong Buy).

Shares of Popular have gained 90.1% over the past six months compared with the industry’s growth of 83.8%.

Here are a few other factors that make the stock a viable investment option.

Earnings per Share (EPS) Growth: In the last three-five years, the company witnessed EPS growth of 17.6%. Further, the company’s earnings are projected to be up 14.1% and 4.8% for 2021 and 2022, respectively.

Moreover, it has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 28.3%.

Revenue Strength: Popular’s revenues witnessed a CAGR of 7.7% over the past five years (2016-2020). The upward trend is expected to continue in the near term, with support from loan growth and Popular’s efforts to grow fee income. Further, the company’s revenues are projected to be up 1.2% for 2021.

Impressive Balance Sheet Growth: The company’s loans and deposits witnessed a CAGR of 5.3% and 15.4%, respectively, over a five-year period (ended 2020). Also, both loan and deposit balances are likely to improve in the quarters ahead.

Strong Leverage: Popular’s debt/equity ratio, which stands at 0.00, indicates that the company doesn’t use long-term debt to finance its operations. Further, the industry’s debt/equity ratio stands at 0.2 currently. This reflects the company’s financial stability, even in adverse economic conditions.

Steady Capital-Deployment Activities: The company remains committed to enhancing shareholder value. Notably, in January 2020, it raised the quarterly common stock dividend by 33%. Share repurchases currently remain suspended due to the impact of the pandemic.

Superior Return on Equity (ROE): Popular has an ROE of 8.67%, which is higher than the industry’s ROE of 8.58%. This reflects that the company reinvests its cash more efficiently than its peers.

Other Stocks to Consider

Regions Financial Corporation RF recorded an upward earnings estimate revision of 14.4% for 2021 over the past 60 days. The stock, which has surged 80.4% over the past six months, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Synovus Financial Corp. SNV witnessed an upward earnings estimate revision of 19.3% for the current year in the past 60 days. Shares of the company have rallied 116.9% over the past six months. At present, it carries a Zacks Rank of 2.

Hilltop Holdings Inc.’s HTH earnings estimates for the ongoing year have moved 12.4% north in 60 days’ time. In the past six months, the company’s shares have gained 66.3%. Currently, it carries a Zacks Rank of 2.

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