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3 Reasons Why SVB Financial (SIVB) Stock is Worth Buying Now
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Over the past few months, banking stocks have been witnessing an upward momentum, driven by improved earnings. Further, expectations of lesser regulations and lower tax rates are driving the rally. Also, the Fed’s two rate hikes in last three months are likely to improve margins for most of the banks. Moreover, expectations of two more rate hikes this year have injected optimism.
Therefore, this a good time to add a few banking stocks in your portfolio. Today, we bring one such stock – SVB Financial Group – that continues to depict strong fundamentals and improving prospects.
Further, this Zacks Rank #2 (Buy) stock increased nearly 65.3% year to date, outperforming the Zacks categorized Banks-West industry’s gain of 28%.
Why a Solid Pick?
Revenue Strength: SVB Financial’s net revenue has risen at a compounded annual growth rate (“CAGR”) of 13.8% over the last five years (2012–2016). The sturdy top-line increase was backed by strong loan and deposit growth.
Additionally, the company’s projected sales growth (F1/F0) of 14% compared with 4.5% for the industry ensures continuation of the upward revenue trend.
Earnings Per Share Growth: SVB Financial witnessed approximately 20.8% rise in earnings per share over the last three–five years. Further, this earnings momentum will likely continue in the near term, as reflected by the company’s projected EPS (earnings per share) growth (F1/F0) of 17%.
Also, the company’s long-term (three–five years) estimated EPS growth rate of 11.0% (versus the industry growth rate of 9.6%) promises rewards for investors in the long run.
Superior ROE: SVB Financial’s Return on Equity (ROE) ratio is 10.11% compared with industry average of 10%. This indicates that the company reinvests more efficiently compared to the industry.
BancFirst Corporation witnessed upward earnings estimate revision of 0.4% over the past 60 days. Also, its share price is up 22.2% over the last six months.
Southside Bancshares' earnings estimates moved north roughly 3% over the past 60 days. Its share price is up 1.5% over the last six months.
Texas Capital witnessed an upward earnings estimate revision of nearly 1% over the past two months. Over the last six months, its share price surged 46.8%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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3 Reasons Why SVB Financial (SIVB) Stock is Worth Buying Now
Over the past few months, banking stocks have been witnessing an upward momentum, driven by improved earnings. Further, expectations of lesser regulations and lower tax rates are driving the rally. Also, the Fed’s two rate hikes in last three months are likely to improve margins for most of the banks. Moreover, expectations of two more rate hikes this year have injected optimism.
Therefore, this a good time to add a few banking stocks in your portfolio. Today, we bring one such stock – SVB Financial Group – that continues to depict strong fundamentals and improving prospects.
Further, this Zacks Rank #2 (Buy) stock increased nearly 65.3% year to date, outperforming the Zacks categorized Banks-West industry’s gain of 28%.
Why a Solid Pick?
Revenue Strength: SVB Financial’s net revenue has risen at a compounded annual growth rate (“CAGR”) of 13.8% over the last five years (2012–2016). The sturdy top-line increase was backed by strong loan and deposit growth.
Additionally, the company’s projected sales growth (F1/F0) of 14% compared with 4.5% for the industry ensures continuation of the upward revenue trend.
Earnings Per Share Growth: SVB Financial witnessed approximately 20.8% rise in earnings per share over the last three–five years. Further, this earnings momentum will likely continue in the near term, as reflected by the company’s projected EPS (earnings per share) growth (F1/F0) of 17%.
Also, the company’s long-term (three–five years) estimated EPS growth rate of 11.0% (versus the industry growth rate of 9.6%) promises rewards for investors in the long run.
Superior ROE: SVB Financial’s Return on Equity (ROE) ratio is 10.11% compared with industry average of 10%. This indicates that the company reinvests more efficiently compared to the industry.
Other Stocks Worth a Look
Some other stocks worth considering from the finance space include BancFirst Corporation (BANF - Free Report) , Southside Bancshares, Inc. (SBSI - Free Report) and Texas Capital Bancshares, Inc. (TCBI - Free Report) . All these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
BancFirst Corporation witnessed upward earnings estimate revision of 0.4% over the past 60 days. Also, its share price is up 22.2% over the last six months.
Southside Bancshares' earnings estimates moved north roughly 3% over the past 60 days. Its share price is up 1.5% over the last six months.
Texas Capital witnessed an upward earnings estimate revision of nearly 1% over the past two months. Over the last six months, its share price surged 46.8%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>