U.S. Markets open in 9 hrs 9 mins
  • Crude Oil

    70.51
    -0.05 (-0.07%)
     
  • Gold

    1,768.40
    -9.80 (-0.55%)
     
  • Silver

    23.03
    +0.46 (+2.05%)
     
  • EUR/USD

    1.1696
    -0.0034 (-0.2924%)
     
  • 10-Yr Bond

    1.3360
    +0.0120 (+0.91%)
     
  • Vix

    20.87
    -3.49 (-14.33%)
     
  • GBP/USD

    1.3619
    -0.0045 (-0.3282%)
     
  • USD/JPY

    109.7800
    +0.5600 (+0.5127%)
     
  • BTC-USD

    44,263.70
    +171.49 (+0.39%)
     
  • CMC Crypto 200

    1,089.55
    +49.07 (+4.72%)
     
  • FTSE 100

    7,083.37
    +102.39 (+1.47%)
     
  • Nikkei 225

    29,639.40
    -200.31 (-0.67%)
     

With EPS Growth And More, Seacoast Banking Corporation of Florida (NASDAQ:SBCF) Is Interesting

  • Oops!
    Something went wrong.
    Please try again later.
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

In contrast to all that, I prefer to spend time on companies like Seacoast Banking Corporation of Florida (NASDAQ:SBCF), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

See our latest analysis for Seacoast Banking Corporation of Florida

Seacoast Banking Corporation of Florida's Earnings Per Share Are Growing.

As one of my mentors once told me, share price follows earnings per share (EPS). That makes EPS growth an attractive quality for any company. As a tree reaches steadily for the sky, Seacoast Banking Corporation of Florida's EPS has grown 20% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Not all of Seacoast Banking Corporation of Florida's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. While we note Seacoast Banking Corporation of Florida's EBIT margins were flat over the last year, revenue grew by a solid 24% to US$328m. That's progress.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

earnings-and-revenue-history
earnings-and-revenue-history

Fortunately, we've got access to analyst forecasts of Seacoast Banking Corporation of Florida's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Seacoast Banking Corporation of Florida Insiders Aligned With All Shareholders?

It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own Seacoast Banking Corporation of Florida shares worth a considerable sum. Indeed, they hold US$38m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 1.9% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

It means a lot to see insiders invested in the business, but I find myself wondering if remuneration policies are shareholder friendly. A brief analysis of the CEO compensation suggests they are. I discovered that the median total compensation for the CEOs of companies like Seacoast Banking Corporation of Florida with market caps between US$1.0b and US$3.2b is about US$3.7m.

The Seacoast Banking Corporation of Florida CEO received total compensation of just US$1.4m in the year to . That looks like modest pay to me, and may hint at a certain respect for the interests of shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of good governance, more generally.

Should You Add Seacoast Banking Corporation of Florida To Your Watchlist?

For growth investors like me, Seacoast Banking Corporation of Florida's raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. This may only be a fast rundown, but the takeaway for me is that Seacoast Banking Corporation of Florida is worth keeping an eye on. However, before you get too excited we've discovered 3 warning signs for Seacoast Banking Corporation of Florida that you should be aware of.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.