M&T Bank Corporation’s MTB sound organic and inorganic growth strategies, as well as a robust capital position make it an solid choice now. Further, its underlying strength, earnings growth prospects and efforts to enhance shareholders value are encouraging.
The Zacks Consensus Estimate for the current year has inched up nearly 1%, reflecting analysts’ optimism about the company’s prospects, over the past 30 days.
Further, shares of this Zacks Rank #2 (Buy) company have gained around 3.4% over the past three months against slight decline recorded by the industry it belongs to.
Notably, M&T Bank has a number of other aspects that make it an attractive investment option.
Why M&T Bank is a Must Buy
Revenue Growth: M&T Bank revenues witnessed a CAGR of 5.5% over the last three years (2016-2018). Further, the company’s projected sales growth (F1/F0) of 3.83% indicates constant upward momentum in revenues.
Earnings Per Share Strength: Earnings are anticipated to display an upswing in the near term, as the company’s projected EPS growth (F1/F0) is 13.67% compared to the industry average rate of 8.65%. Also, M&T Bank pulled off an average positive earnings surprise of 6.34% over the trailing four quarters.
Inorganic Growth: Given its robust liquidity position, M&T Bank is well positioned to grow on the back of acquisitions. The growth has been reflected in the company’s accomplishment of several major acquisitions in and out of the United States, in the past several years.
Steady Capital Deployment: M&T Bank’s capital-deployment activities remain impressive. The company’s 2018 capital plan was approved by the Fed. The plan included share buyback of up to $1.8 billion over a four-quarter period, effective July 2018. The latest quarterly common stock dividend hike was 25% in August 2018.
Superior Return on Equity (ROE): M&T Bank has a ROE of 14.24%, which is far better than the industry average of 12.83%. This shows that the company reinvests cash more efficiently than its peers.
Stock is Undervalued: The stock currently has a Value Score of B. 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. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Strong Leverage: M&T Bank’s debt/equity ratio is valued at 0.59 compared to the industry average of 0.92, indicating relatively lower debt burden. It highlights the financial stability of the company even in adverse economic conditions.
Other Stocks to Consider
Bank of Marin Bancorp BMRC has witnessed 3.6% upward estimate revisions for the current year over the past 30 days. Additionally, the stock has jumped more than 9% in the past three months. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Popular’s BPOP estimates have been revised 2.6% upward for 2019 over the past 30 days. Also, the company’s shares have risen nearly 6% over the past three months. It holds a Zacks Rank of 2, at present.
Camden National Corporation CAC estimates have been revised 1.4% north for the current year over the past 30 days. In three months’ time, this Zacks #2 Ranked company’s share price has been up more than 9%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
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M&T Bank Corporation (MTB) : Free Stock Analysis Report
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Bank of Marin Bancorp (BMRC) : Free Stock Analysis Report
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