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5 Reasons to Add U.S. Bancorp Stock to Your Portfolio Now
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Since Donald Trump's victory, banking stocks are on a rally. Expectations of lesser regulations and a better interest-rate environment along with the strengthening of domestic economy have created further optimism.
Moreover, banking stocks have come out as the biggest winners from this market rally. So, we bring to you U.S. Bancorp (USB - Free Report) , whose diverse revenue streams, solid business model, core franchise and a robust balance sheet make it a good investment option now.
Notably, shares of this company have increased 20.4% in 2016, outpacing the 19.4% gain for the Zacks categorized Major Regional Banks industry.
Looking at the estimate revision trend, U.S. Bancorp’s earnings estimates for the current year have been revised 2.4% upward, over the past 60 days. This indicates that there is still upside left for this stock. As a result, the stock, currently, carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fundamentals Seem Impressive
Earnings Per Share Growth: Over the past three to five years, U.S. Bancorp witnessed earnings per share (EPS) growth of 7.62%. Notably, the company has a decent earnings surprise history, having delivered positive surprises in three of the trailing four quarters with an average beat of 1.26%.
Further, the company’s earnings are projected to grow 7.26% in 2017 and 9.22% in 2018. Also, its long-term (three to five years) estimated EPS growth rate of 7% promises rewards for investors in the long run.
Revenue Strength: U.S. Bancorp is expected to deliver sales growth of 4.58% for 2017 and 5.70% for 2018.
Moreover, the company witnessed average loan growth at a five year CAGR of 5.6% in 2016. Also, with the expectation of an increase in loan balances amid an improving economy, we expect the company’s revenues to grow further over the longer term.
Superior Return on Equity (ROE): U.S. Bancorp’s current ROE is 12.94% compared with the industry average of 9%. This reflects the company’s better position in terms of efficiently using equity financing.
Strong Leverage: U.S. Bancorp’s debt/equity ratio stands at 0.79 compared with the industry average of 0.86, reflecting relative lower debt burden. It indicates the company’s financial stability even amid an unstable economic environment.
Efficient Capital Deployment: U.S. Bancorp has been consistently enhancing shareholder value with steady capital deployment activities. Notably, in Sep 2016, it raised the quarterly dividend by 9.8% to 28 cents per share. Also, the company has a dividend yield of 2.34%, better than the industry average of 2.24%.
Further, management has a target payout ratio of 60–80%.
Other Stocks Worth a Look
Some other similarly ranked stocks in the same space worth considering include Bank of America Corporation (BAC - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and The PNC Financial Services Group, Inc. (PNC - Free Report) .
Bank of America has witnessed an upward earnings estimate revision of nearly 1% for the current year, over the past 30 days. Its share price has risen 54.4%, in the last six months.
JPMorgan’s current-year earnings have witnessed a slight upward estimate revision over the past 30 days. Its share price has increased 34.8%, in the last six months.
PNC Financial has also witnessed a marginal upward earnings estimate revision for the current year, over the past 30 days. Its share price has risen 41.4%, in the last six months.
Everything You Need to Know About Snapchat BEFORE It Goes Public
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In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
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5 Reasons to Add U.S. Bancorp Stock to Your Portfolio Now
Since Donald Trump's victory, banking stocks are on a rally. Expectations of lesser regulations and a better interest-rate environment along with the strengthening of domestic economy have created further optimism.
Moreover, banking stocks have come out as the biggest winners from this market rally. So, we bring to you U.S. Bancorp (USB - Free Report) , whose diverse revenue streams, solid business model, core franchise and a robust balance sheet make it a good investment option now.
Notably, shares of this company have increased 20.4% in 2016, outpacing the 19.4% gain for the Zacks categorized Major Regional Banks industry.
Looking at the estimate revision trend, U.S. Bancorp’s earnings estimates for the current year have been revised 2.4% upward, over the past 60 days. This indicates that there is still upside left for this stock. As a result, the stock, currently, carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fundamentals Seem Impressive
Earnings Per Share Growth: Over the past three to five years, U.S. Bancorp witnessed earnings per share (EPS) growth of 7.62%. Notably, the company has a decent earnings surprise history, having delivered positive surprises in three of the trailing four quarters with an average beat of 1.26%.
Further, the company’s earnings are projected to grow 7.26% in 2017 and 9.22% in 2018. Also, its long-term (three to five years) estimated EPS growth rate of 7% promises rewards for investors in the long run.
Revenue Strength: U.S. Bancorp is expected to deliver sales growth of 4.58% for 2017 and 5.70% for 2018.
Moreover, the company witnessed average loan growth at a five year CAGR of 5.6% in 2016. Also, with the expectation of an increase in loan balances amid an improving economy, we expect the company’s revenues to grow further over the longer term.
Superior Return on Equity (ROE): U.S. Bancorp’s current ROE is 12.94% compared with the industry average of 9%. This reflects the company’s better position in terms of efficiently using equity financing.
Strong Leverage: U.S. Bancorp’s debt/equity ratio stands at 0.79 compared with the industry average of 0.86, reflecting relative lower debt burden. It indicates the company’s financial stability even amid an unstable economic environment.
Efficient Capital Deployment: U.S. Bancorp has been consistently enhancing shareholder value with steady capital deployment activities. Notably, in Sep 2016, it raised the quarterly dividend by 9.8% to 28 cents per share. Also, the company has a dividend yield of 2.34%, better than the industry average of 2.24%.
Further, management has a target payout ratio of 60–80%.
Other Stocks Worth a Look
Some other similarly ranked stocks in the same space worth considering include Bank of America Corporation (BAC - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) and The PNC Financial Services Group, Inc. (PNC - Free Report) .
Bank of America has witnessed an upward earnings estimate revision of nearly 1% for the current year, over the past 30 days. Its share price has risen 54.4%, in the last six months.
JPMorgan’s current-year earnings have witnessed a slight upward estimate revision over the past 30 days. Its share price has increased 34.8%, in the last six months.
PNC Financial has also witnessed a marginal upward earnings estimate revision for the current year, over the past 30 days. Its share price has risen 41.4%, in the last six months.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO
Watch List today for free >>