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Amid the coronavirus pandemic, it seems to be a wise idea to add ServisFirst Bancshares, Inc. SFBS stock to your portfolio now, given its underlying strength and solid growth prospects. The company has been undertaking several initiatives to improve efficiency and optimize operations.
Further, the Zacks Consensus Estimate for the current-year and next-year earnings has moved upward over the past 60 days, reflecting analyst optimism regarding its earnings growth potential. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Shares of ServisFirst Bancshares have gained 34.7% in the past three months compared with the industry’s growth of 15.9%.
Why is ServisFirst Bancshares a Must Buy?
Revenue Strength: The company has witnessed a rise in net revenues over the last five years. Total revenues are projected to grow at a rate of 23.7% in 2020 (compared with the nil industry average). This upward trend is anticipated to be supported by a decent lending scenario and the company’s efforts to boost its fee income.
Earnings Growth: ServisFirst Bancshares has witnessed earnings growth of 23.5% in the last three to five years. This earnings momentum is likely to continue in the near term as reflected by the company’s projected earnings per share (EPS) growth rate (F1/F0) of 0.73% compared with the industry’s negative average of 20%. Notably, ServisFirst Bancshares reflects impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters for as many misses.
Steady Capital-Deployment Activities: The company remains committed to enhancing its shareholder value. The bank has been actively paying common stock dividends for years, with the latest hike in December 2019.
Strong leverage: ServisFirst Bancshares’ debt/equity ratio is 0.07, compared with the industry average of 0.77, displaying a lower debt burden relative to the industry. It highlights the financial stability of the company even in an unstable economic environment.
Superior Return on Equity (ROE): ServisFirst Bancshares has an ROE of 17.83% better than the industry average of 7.75%. This shows that the company reinvests its cash more efficiently.
Other Stocks to Consider
State Street Corporation STT has witnessed upward earnings estimate revisions for 2020 over the past 30 days. Moreover, this Zacks #2 Ranked stock has gained 31% over the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GAIN Capital Holdings, Inc.’s GCAP current-year earnings estimate moved north in 30 days’ time. Further, the company’s shares have rallied 5.7% over the past three months. At present, it carries a Zacks Rank of 2.
Mercantile Bank Corporation MBWM has witnessed upward earnings estimate revisions for the ongoing year in the past 30 days. This Zacks #1 Ranked stock has appreciated 2.5% over the past three months.
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