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6 Reasons Why Hancock Whitney (HWC) is an Attractive Pick Now
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Hancock Whitney Corporation (HWC - Free Report) stock is a good investment option right now. Supported by higher interest rates, loan growth and the company’s inorganic expansion efforts, its revenues are anticipated to keep improving. HWC’s efficient capital deployment activities reflect a solid balance sheet position.
Analysts seem to be optimistic regarding the company’s earnings growth prospects. In the past 60 days, the Zacks Consensus Estimate for HWC’s current-year earnings has moved 1.5% upward. The company currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 2.2% in the past year against a 0.5% decline recorded by the industry.
Image Source: Zacks Investment Research
A few factors that make Hancock Whitney stock an attractive pick are mentioned below.
Key Factors to Note
Earnings Strength: Hancock Whitney’s earnings witnessed growth of 10.6% over the last three to five years. In 2019, the company acquired MidSouth Bancorp, which continues to be accretive to earnings. With the company’s continued strategic investments in growth and new markets, the upward momentum will likely persist in the near term.
In 2022, Hancock Whitney’s earnings are projected to increase 7.8%. For 2023, earnings are projected to rise 3.1%.
Tthe company has an impressive earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in three and met in one of the trailing four quarters.
Revenue Growth: Supported by the rise in loan balances, the company’s revenues (on a tax-equivalent basis) witnessed a compound annual growth rate (CAGR) of 6.9% over the last six years (2016-2021), with the uptrend continuing in the first nine months of 2022.
For 2022, the company’s top line is projected to grow 7.6%. For 2023, revenues are expected to increase 10.2%.
Solid Capital Deployment Actions: Hancock Whitney’s capital deployment plans seem impressive, through which it is expected to keep enhancing shareholder value. In 2018, the bank hiked its quarterly dividend by 12.5% and has maintained the same level since then. While share repurchases were suspended in 2020 due to coronavirus-related concerns, the company authorized the repurchase of up to 4.3 million shares in April 2021, which is set to expire on Dec 31, 2022. As of Sep 30, 2022, 2.7 million shares remained under the current authorization.
Strong Leverage: Currently, Hancock Whitney has a debt/equity ratio of 0.07. This compares favorably with the industry average of 0.15. Given the relatively low debt/equity ratio than its peers, the company is expected to be financially stable, even in adverse economic conditions.
Superior Return on Equity (ROE): Hancock Whitney’s trailing 12-month ROE reflects its superiority in utilizing shareholder funds compared with its peers. The company has an ROE of 15.08%, higher than the industry average of 11.34%.
Favorable Valuation: Hancock Whitney stock looks undervalued right now when compared with the broader industry. Its current price/earnings and price/cash flow ratios are below the respective industry averages.
It has a P/E (F1) ratio of 9.14, lower than the industry average of 10.82. Its P/CF ratio of 8.07 compares with the industry average of 9.39.
The Zacks Consensus Estimate for Amerant Bancorp’s 2022 earnings has moved 10% upward over the past 60 days. Over the past three months, AMTB’s shares have gained 9.1%.
The Zacks Consensus Estimate for F.N.B. Corp’s 2022 earnings has been revised 3.8% upward in the past 60 days. FNB’s shares have rallied 10.7% in the past three months.
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6 Reasons Why Hancock Whitney (HWC) is an Attractive Pick Now
Hancock Whitney Corporation (HWC - Free Report) stock is a good investment option right now. Supported by higher interest rates, loan growth and the company’s inorganic expansion efforts, its revenues are anticipated to keep improving. HWC’s efficient capital deployment activities reflect a solid balance sheet position.
Analysts seem to be optimistic regarding the company’s earnings growth prospects. In the past 60 days, the Zacks Consensus Estimate for HWC’s current-year earnings has moved 1.5% upward. The company currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 2.2% in the past year against a 0.5% decline recorded by the industry.
Image Source: Zacks Investment Research
A few factors that make Hancock Whitney stock an attractive pick are mentioned below.
Key Factors to Note
Earnings Strength: Hancock Whitney’s earnings witnessed growth of 10.6% over the last three to five years. In 2019, the company acquired MidSouth Bancorp, which continues to be accretive to earnings. With the company’s continued strategic investments in growth and new markets, the upward momentum will likely persist in the near term.
In 2022, Hancock Whitney’s earnings are projected to increase 7.8%. For 2023, earnings are projected to rise 3.1%.
Tthe company has an impressive earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in three and met in one of the trailing four quarters.
Revenue Growth: Supported by the rise in loan balances, the company’s revenues (on a tax-equivalent basis) witnessed a compound annual growth rate (CAGR) of 6.9% over the last six years (2016-2021), with the uptrend continuing in the first nine months of 2022.
For 2022, the company’s top line is projected to grow 7.6%. For 2023, revenues are expected to increase 10.2%.
Solid Capital Deployment Actions: Hancock Whitney’s capital deployment plans seem impressive, through which it is expected to keep enhancing shareholder value. In 2018, the bank hiked its quarterly dividend by 12.5% and has maintained the same level since then. While share repurchases were suspended in 2020 due to coronavirus-related concerns, the company authorized the repurchase of up to 4.3 million shares in April 2021, which is set to expire on Dec 31, 2022. As of Sep 30, 2022, 2.7 million shares remained under the current authorization.
Strong Leverage: Currently, Hancock Whitney has a debt/equity ratio of 0.07. This compares favorably with the industry average of 0.15. Given the relatively low debt/equity ratio than its peers, the company is expected to be financially stable, even in adverse economic conditions.
Superior Return on Equity (ROE): Hancock Whitney’s trailing 12-month ROE reflects its superiority in utilizing shareholder funds compared with its peers. The company has an ROE of 15.08%, higher than the industry average of 11.34%.
Favorable Valuation: Hancock Whitney stock looks undervalued right now when compared with the broader industry. Its current price/earnings and price/cash flow ratios are below the respective industry averages.
It has a P/E (F1) ratio of 9.14, lower than the industry average of 10.82. Its P/CF ratio of 8.07 compares with the industry average of 9.39.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the finance space are Amerant Bancorp Inc. (AMTB - Free Report) and F.N.B. Corporation (FNB - Free Report) . At present, AMTB sports a Zacks Rank #1 (Strong Buy), whereas FNB carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amerant Bancorp’s 2022 earnings has moved 10% upward over the past 60 days. Over the past three months, AMTB’s shares have gained 9.1%.
The Zacks Consensus Estimate for F.N.B. Corp’s 2022 earnings has been revised 3.8% upward in the past 60 days. FNB’s shares have rallied 10.7% in the past three months.