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Why Umpqua Holdings (UMPQ) is Worth Adding to Your Portfolio

Zacks Equity Research

It seems to be a wise decision to add Umpqua Holdings Corporation UMPQ stock to your portfolio now, given the company’s efforts to improve efficiency and enhance profitability through operational excellence initiatives. Also, its organic growth, aided by rising loans and deposits, bodes well for the future.

Umpqua Holdings’ encouraging capital-deployment activities reflect a strong balance sheet position. Further, the company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

The company’s Zacks Consensus Estimate for 2019 earnings has been revised slightly upward over the past 60 days. The stock currently carries a Zacks Rank #2 (Buy).

Furthermore, shares of the company have lost around 24.2% in six months’ time compared with 22.1% decline recorded by the industry.

There are a number of other aspects that make Umpqua Holdings an attractive investment option.

Why Umpqua Holdings is a Must Buy

Organic Growth: Umpqua Holdings continues to make steady progress toward improving its top line, with sales recording four-year compounded annual growth rate (CAGR) of around 29% during 2014-2017. Furthermore, the company’s projected sales growth of nearly 3.4% for 2019 indicates constant upward momentum in revenues.

Earnings Strength: Umpqua Holdings recorded earnings growth rate of 5.2% over the last three to five years. Also, earnings are expected to display an upswing in the near term, as the company’s projected EPS growth (3-5 years) is 9%. Additionally, Umpqua Holdings projects earnings growth of nearly 14.7% for 2019.

Stock Looks Undervalued: The stock currently has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score, which helps investors to steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.

Other Stocks to Consider

Saratoga Investment Corp SAR has been witnessing upward estimate revisions for the past 90 days. In addition, this Zacks #1 Ranked stock has rallied more than 4% in the past two years. You can see the complete list of today’s Zacks #1 Rank stocks here.

Credit Acceptance Corporation CACC has been witnessing upward estimate revisions for the past 90 days. Also, the company’s shares have surged nearly 95.8% in the past two years. It carries a Zacks Rank of 2 at present.

GSV Capital Corp GSVC has been witnessing upward estimate revisions for the past 90 days. Additionally, the stock has jumped around 7.9% over the past two years. It currently carries a Zacks Rank #2.

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