It seems to be a wise idea to add Meta Financial Group, Inc. CASH stock to your portfolio now, given strong fundamentals and promising prospects. Further, decent loan demand and solid balance sheet are likely to continue supporting profitability.
The Zacks Consensus Estimate for the bottom line for the current year has remained stable, while the same has moved 18.5% upward over the past seven days, indicating the company’s sound earnings growth potential. Currently, the stock sports a Zacks Rank #1 (Strong Buy).
Shares of Meta Financial have declined 34.9% over the past year compared with the industry’s 24.3% fall.
Here are a few factors that make it an attractive investment option right now.
Revenue Growth: Organic growth is a key strength for Meta Financial. The top line witnessed a five-year (fiscal 2015-2019) compound annual growth rate of 46.3%. Decent loan demand and strong deposit balance are likely to continue supporting revenues.
In 2018, the company had acquired Crestmark Bancorp, Inc., which expanded its presence in the commercial lending industry, in turn boosting revenues. Though revenues are expected to fall marginally in the current year, the same is expected to grow at a rate of 2.6% in 2021.
Strong Leverage: Meta Financial’s debt/equity ratio is 0.26 compared with the industry average of 0.77. This reflects that the company will be financially stable, even during adverse economic situations.
Superior Return on Equity (ROE): Meta Financial’s ROE of 12.64% compares favorably with the industry average of 7.75%. This highlights the company’s commendable position over peers in using shareholders’ funds.
Stock Seems undervalued: The company looks undervalued with respect to price/earnings (P/E) (F1) and price/cash flow (P/CF) ratios. It has a P/E (F1) ratio of 7.52, which is below the industry average of 12.90. Also, its P/CF ratio of 4.34 is lower than the industry average of 8.38.
Meta Financial has a Value Score of A. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Key Picks
BlackRock, Inc. BLK has witnessed an upward earnings estimate revision of 3% for 2020 over the past 30 days. Its shares have gained 19.7% over the past year. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Affiliated Managers Group’s AMG earnings estimates for the current year have moved 2.6% upward over the past 60 days. The stock has appreciated 66.6% over the past three months. The company currently carries a Zacks Rank #2.
GAIN Capital Holdings’ GCAP earnings estimates for 2020 have increased significantly over the past 60 days. Further, the company’s shares have gained 28.3% over the past three months. At present, it has a Zacks Rank #2.
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