Wintrust Financial Corporation WTFC appears to be a solid bet now, driven by strong fundamentals and promising prospects. The factors that might drive the stock higher include impressive organic growth, strategic efforts to boost presence and capital strength.
Over the past 30 days, the Zacks Consensus Estimate for earnings for 2020 and 2021 has been revised 2% and 3.8% upward, respectively.
Further, shares of this Zacks Rank #2 (Buy) firm have gained 19.8% in the past six months, outperforming 4.9% growth recorded by the industry it belongs to.
Wintrust Financial has a number of other aspects that make it an attractive investment option.
Revenue Strength: Wintrust Financial continues to make steady progress toward improving its top line since 2013. The company recorded a consistent rise in its sales, witnessing five-year compound annual growth rate (CAGR) of nearly 16% (ended 2019).
The company’s projected sales growth (F1/F0) of 10.06% (against the industry’s average of about 2.55%) indicates constant upward momentum in revenues.
Solid Inorganic Growth Strategies: Wintrust Financial’s capital strength has been helping it to grow inorganically. As part of this strategy, the company completed the acquisition of Countryside Bank STC Capital Bank in 2019. The deal bolstered its presence in western suburbs of the Chicago metropolitan area.
Earnings Growth: In the last three-five years, the company witnessed earnings growth of 16.31% compared with the industry’s average of 12.81%. In addition, the company’s long-term (three-five years) estimated earnings per share growth rate of 17% promises rewards for investors over the long run.
Impressive Balance Sheet Growth: Wintrust Financial’s loans and deposits witnessed a CAGR of 11.9% and 12.7%, respectively, over a five-year period (ended 2019). Also, both loan and deposit balances are likely to improve in the quarters ahead.
Reasonable Valuation: The stock looks undervalued right now when compared with its broader industry. It currently has a price-to-cash flow ratio of 5.75, lower than the industry average of 6.72. Also, its price-to-book ratio of 0.73 is below the industry’s 0.82.
Moreover, the stock has a Value Score of A. The Value Style Score condenses all valuation metrics into one actionable score, which helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Other Stocks to Consider
Peoples Bancorp PEBO has witnessed upward earnings estimate revisions for 2020 over the past 60 days. Also, this Zacks #2 Ranked stock has lost 6.6% over the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Guaranty Bancshares’ GNTY ongoing-year earnings estimates have moved up in the past 60 days. The company’s shares have gained 18.8% over the past six months. At present, it carries a Zacks Rank of 2.
Piper Sandler Companies’ PIPR current-year earnings estimates have moved north in 60 days’ time. The stock has surged 47.2% over the past six months. It currently sports a Zacks Rank #1.
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Wintrust Financial Corporation (WTFC): Free Stock Analysis Report
Peoples Bancorp Inc. (PEBO): Free Stock Analysis Report
Guaranty Bancshares Inc. (GNTY): Free Stock Analysis Report
Piper Sandler Companies (PIPR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.