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Here's Why State Street (STT) Stock is a Solid Bet Right Now

Zacks Equity Research

From the vast universe of banking stocks, today we pick State Street Corporation STT for you. The company offers a profitable investment opportunity based on steady revenue growth and robust fundamentals.

The stock has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for 2019 and 2020 displayed an upward trend.

Further, this Zacks Rank #1 (Strong Buy) stock has gained 26.8%, year to date, compared with its industry’s growth of 35%.



Why State Street is an Attractive Pick

Revenue Strength: State Street has been witnessing continued improvement in revenues. Over the past five years (2014-2018), total revenues witnessed a compound annual growth rate of nearly 3.9%. Continuous investment in new products, business wins and inorganic growth strategy will likely strengthen the company’s revenue generation in the quarters ahead.

Earnings per Share Growth: State Street recorded an earnings growth rate of 8.3% over the last three to five years. Also, its long-term (three to five years) estimated EPS growth rate of 8.31% promises rewards for investors over the long run.

Impressive Capital Deployment: State Street has a commendable capital-deployment plan. The company’s 2019 capital plan (approved by the Federal Reserve) included a 10.6% dividend hike and $2-billion share-repurchase authorization. Given its solid liquidity position and earnings strength, the company is expected to be able to sustain improved capital deployments and continue enhancing shareholders’ value.

Strong Leverage: State Street’s debt/equity ratio is 0.53 compared with the industry average of 0.95, indicating a relatively lower debt burden. This reflects the company’s financial stability amid adverse economic conditions.

Other Stocks to Consider

Bank of America Corporation BAC has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #2 Ranked stock has rallied more than 42%, year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Bank of New York Mellon Corporation BK has been witnessing upward estimate revisions for the past 60 days. Further, the company’s shares have gained 8.4%, year to date. At present, it carries a Zacks Rank of 2.

BlackRock, Inc. BLK has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped around 27.1%, year to date. It currently carries a Zacks Rank #2.

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The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
 
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State Street Corporation (STT) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
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