Signature Bank SBNY looks like an attractive investment option right now, based on its solid growth prospects. The company’s healthy balance sheet position, capital strength and improving economic backdrop are expected to support its growth plans.
The company has been witnessing upward earnings estimate revisions, of late, reflecting analysts’ optimism regarding its earnings growth potential.
The stock’s Zacks Consensus Estimate for 2019 and 2020 earnings has been revised 1.1% upward over the past 60 days. It currently carries a Zacks Rank #2 (Buy).
Notably, its shares have rallied 14.6% over the past three months.
What Makes the Stock a Solid Pick?
Earnings Growth: Signature Bank recorded 16.6% earnings growth over the past three-five years. This momentum is likely to continue in the near term as well, as reflected by the company’s projected earnings growth rate of 1.3% and 7.5% for 2019 and 2020, respectively.
Moreover, Signature Bank has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with average beat being 1.8%.
Furthermore, the company’s long-term (three-five years) estimated EPS growth rate of 10.8% promises rewards for investors.
Revenue Growth: Signature Bank’s revenues witnessed a CAGR of 15.9% over the last five years (2014-2018). Growth in loans and deposits are expected to further drive the top-line performance. In addition, the top line will likely be up 4.2% in 2019 and 8% in 2020.
Superior Return on Equity (ROE): Signature Bank has an ROE of 14.70%, which is better than the industry average of 10.35%. This shows that the company reinvests its cash more efficiently than peers.
Stock Trades at a Discount: Signature Bank’s current price-earnings (P/E) and PEG ratios are lower than the respective industry averages. The company’s PEG ratio of 1.11 compares favorably with the industry average of 1.31. Further, its P/E ratio of 11.96 comes in lower than the industry average of 12.03.
Additionally, Signature Bank 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 to identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Key Picks
Atlantic Capital Bancshares, Inc.’s ACBI shares have gained 6.5% over the past three months. The stock flaunts a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Univest Financial Corporation’s UVSP shares have rallied 8.9% in three months’ time. It currently sports a Zacks Rank of 1.
The Bank of Princeton BPRN, another Zacks #1 Ranked stock, has appreciated 12% in the past three months.
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Signature Bank (SBNY) : Free Stock Analysis Report
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