Driven by strong fundamentals and good growth prospects, Fulton Financial Corporation FULT looks like an attractive investment option right now. Moreover, its earnings estimates have been increasing lately, indicating analysts’ optimism regarding the company’s growth potential.
The Zacks Consensus Estimate for 2018 earnings has been revised 1.8% upward over the past 60 days. Thus, 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.
Further, shares of Fulton Financial gained 1.2% in the last three months against the industry’s decline of 3.8%. Given the upward estimate revisions and a solid Zacks Rank, the stock is expected to gain further.
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Mentioned below are some other factors that make Fulton Financial an attractive pick right now.
Earnings per Share (EPS) Growth: In the last three-five years, Fulton Financial witnessed EPS growth of 5.7%. The uptrend is likely to continue in the near term, which can be seen from the projected earnings growth of 7.5% and 19% for 2018 and 2019, respectively.
The company’s long-term (three-five years) estimated EPS growth of 8% promises reward for shareholders.
Revenue Strength: Fulton Financial’s revenues grew at a 5-year (2013-2017) CAGR of 2.4%. Moreover, revenues are anticipated to grow 5.9% in 2018 and 5.7% in 2019.
Strong Leverage: Fulton Financial has a debt/equity ratio of 0.4, slightly lower than the industry average of 0.5. This implies that the company uses lesser debt to finance its operations and it is likely to be financially stable, even in adverse economic conditions.
Valuation Looks Reasonable: Fulton Financial stock looks undervalued right now, with respect to its price-to-book (P/B) and price-to-cash flow (P/CF) ratios. It has a P/B ratio of 1.35 compared with the industry average of 1.41. Moreover, the company’s P/CF ratio of 13.34 is below the industry average of 15.32.
Further, Fulton Financial has a Value Score of B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Other Stocks Worth a Look
Some other stocks worth considering in the same space are First Mid-Illinois Bancshares, Inc. FMBH, Horizon Bancorp, Inc. HBNC and Washington Federal, Inc. WAFD.
Over the past 60 days, First Mid-Illinois Bancshares has witnessed an upward earnings estimate revision of 3.7% for the current year. Its share price increased 7% in the last 12 months. The stock currently carries a Zacks Rank #1.
Horizon Bancorp presently carries a Zacks Rank #2. Over the past 60 days, its Zacks Consensus Estimate for the current year has been revised 2.1% upward. The company’s share price increased 2.8% in the past year.
Currently, Washington Federal also carries a Zacks Rank #2. Over the past 60 days, the company has witnessed a marginal upward earnings estimate revision for the current fiscal. Its share price increased 19.9% in the past two years.
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