Is Now The Time To Put Bank of N.T. Butterfield & Son (NYSE:NTB) On Your Watchlist?
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Bank of N.T. Butterfield & Son (NYSE:NTB). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
See our latest analysis for Bank of N.T. Butterfield & Son
How Fast Is Bank of N.T. Butterfield & Son Growing?
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. We can see that in the last three years Bank of N.T. Butterfield & Son grew its EPS by 9.5% per year. That's a good rate of growth, if it can be sustained.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. It's noted that Bank of N.T. Butterfield & Son's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. EBIT margins for Bank of N.T. Butterfield & Son remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 9.9% to US$549m. That's a real positive.
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of Bank of N.T. Butterfield & Son's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Bank of N.T. Butterfield & Son Insiders Aligned With All Shareholders?
Is Bank of N.T. Butterfield & Son Worth Keeping An Eye On?
As previously touched on, Bank of N.T. Butterfield & Son is a growing business, which is encouraging. You still need to take note of risks, for example - Bank of N.T. Butterfield & Son has 1 warning sign we think you should be aware of.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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