Time to Buy These Top-Rated Finance Stocks Before Earnings?
Financials have kicked off this earnings season with most banks releasing their quarterly results over the next few weeks.
Looking at next week’s earnings lineup, there are a number of top-rated stocks from the Zacks Finance sector and here are a few to consider.
Preferred Bank PFBC: As one of the largest independent commercial banks in California, Preferred Bank’s stock is attractive ahead of its Q3 report on Tuesday, October 17.
Solid quarterly growth is expected as earnings are forecasted to rise 6% year over year at $2.55 per share with sales forecasted to be up 6% as well to $73.40 million. It’s also noteworthy that Preferred Bank has now topped earnings expectations for eight consecutive quarters.
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Preferred Bank's stock is starting to look undervalued considering PFBC shares trade at just 6.1X forward earnings with EPS now forecasted to climb 18% in fiscal 2023 to $10.25 per share. Plus, Preferred Bank offers an enticing 3.44% dividend yield.
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City Holding CHCO: Also expected to report its Q3 results next Tuesday, West Virginia-based City Holding’s stock is worthy of consideration.
The multi-bank holding company provides diversified financial products and services through its subsidiary City National Bank of West Virginia, a retail and consumer-oriented community bank.
City Holding’s Q3 earnings are anticipated at $1.91 a share and up 4% YoY with sales expected to rise 8% to $72.61 million. Remarkably, the company has surpassed EPS estimates for 23 consecutive quarters and topped sales expectations in its last 9 quarterly reports.
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A very respectable 3.12% dividend yield and a reasonable 12X forward earnings multiple is also reassuring with City Holding's annual earnings now projected to be up 11% this year to $7.58 per share.
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Bar Harbor Bancshares BHB: Lastly, Maine-based Bar Harbor Bancshares stock is worth watching ahead of its third quarter results on Wednesday, October 18.
Bar Harbor is a retail bank serving individual customers, small retail establishments, and restaurants among others. BHB shares are intriguing in terms of value despite Q3 earnings projected to dip -12% to $0.67 a share and sales expected to be down -4% to $37 million. Still, Bar Harbor has topped earnings expectations in its last four quarterly reports.
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Plus, Bar Harbor's stock trades near its industry average P/E valuation at 8.4X forward earnings and well below the S&P 500’s 20.4X. Bar Harbor's annual earnings are expected to be virtually flat in FY23 at $2.88 per share but its 4.61% dividend yield is very attractive to income seekers.
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Bottom Line
There is high anticipation for a potential rebound among financials and these regional banks are starting to stand out. At the moment, Preferred Bank, City Holding, and Bar Harbor Bancshares stock all sport a Zacks Rank #2 (Buy) as they look to continue their streaks of strong quarterly results.
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Preferred Bank (PFBC) : Free Stock Analysis Report
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