The Fed’s rate hikes in mid-December 2016 and one in March are likely to improve margins for most of the banks. Moreover, expectations of another two rate hikes this year have injected optimism.

Additionally, banking stocks have been on a rally since the Presidential election. Hence, the time is ripe to add a few banking stocks to your portfolio.

Northern Trust Corporation (NTRS Quick QuoteNTRS - Free Report) is one such stock, which is well positioned to benefit from an improving rate scenario. Moreover, the company’s organic growth seems impressive, supported by rising revenues. Also, it remains committed towards enhancing shareholder value through efficient capital deployment activities.

Notably, shares of this Zacks Rank #2 (Buy) stock gained 23.5% in 2016, outperforming the Zacks categorized Major Regional Banks industry’s growth of 19.4%.



So, let’s look at Northern Trust’s other positives that make it an attractive investment option now.

Earnings per Share (ESP) Growth: Northern Trust witnessed EPS growth of 9.1% in the last 3–5 years. Moreover, earnings are projected to grow at the rate of 8.2% and 14.3% in 2017 and 2018, respectively.

Further, the company’s long-term (3–5 years) estimated EPS growth rate of 8% promises rewards for investors.

Revenue Strength: Northern Trust witnessed its revenues grow at a five-year (2012-2016) CAGR of 6.2%. Moreover, revenues are expected to increase by 5.4% in 2017, higher than the industry’s average growth of 5.3%. Also, the projected sales growth of 6.7% for 2018 ensures an uptrend in revenues, going forward.

Strong Leverage: Northern Trust’s debt/equity ratio stands at 0.35, compared with the industry average of 0.86, pointing to a relatively lower debt burden. This indicates the company’s financial stability even in adverse economic conditions.

Superior Return on Equity (ROE): Northern Trust’s ROE of 11.11% is higher than the industry average of 8.92%. This shows that the company is more efficient in using shareholder’s funds compared to its peers.

Other Stocks to Consider

Some other stocks worth considering in the finance space are Raymond James Financial, Inc. (RJF Quick QuoteRJF - Free Report) , Bank of America Corporation (BAC Quick QuoteBAC - Free Report) and Comerica Incorporated (CMA Quick QuoteCMA - Free Report) .

Raymond James Financial witnessed an upward earnings estimate revision of 3.1% for the current fiscal year, in the last 60 days. Its share price increased 33% in the past six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of America carries a Zacks Rank #2. For the current year, in the last 60 days, the Zacks Consensus Estimate was revised 1.2% upward. The company’s share price increased 54.9% in the last six months.

Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price increased 45.8% in the past six months.

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