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 earnings in 2018 has been revised nearly 1% 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.
However, the company’s price performance does not seem impressive. Its shares lost 12% in the last six months compared with the industry’s decline of 25.6%. Nevertheless, given the upward estimate revisions and a solid Zacks Rank, the stock is expected to gain in the future.
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Mentioned below are some factors that make Fulton Financial an attractive pick right now.
Earnings per Share Growth: In the last three-five years, Fulton Financial witnessed earnings per share (EPS) growth of 6.4%. The uptrend is likely to continue in the near term, which can be seen from the projected earnings growth rate of 12.2% and 18.5% for 2018 and 2019, respectively.
The company’s long-term (three-five years) estimated EPS growth rate of 8% promises reward for shareholders.
Revenue Strength: Fulton Financial’s revenues have grown at a five-year (2013-2017) CAGR of 2.4%. Moreover, revenues are anticipated to grow 6.5% in 2018 and 5.7% in 2019.
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 1.12, marginally lower than the industry average of 1.16. Moreover, the company’s P/CF ratio of 11.23 is below the industry average of 12.07.
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 top-ranked stocks from the finance space are On Deck Capital, Inc. ONDK, Credit Acceptance Corp. CACC and Ally Financial Inc. ALLY.
On Deck Capital currently sports a Zacks Rank #1. Over the past 60 days, it has witnessed an upward earnings estimate revision of 22.7% for the current year. Additionally, the stock has gained 30% in the past two years.
Credit Acceptance’s earnings estimates for the current year have been revised 3.4% upward over the past 60 days. Its shares have surged 64.1% in the past two years. The stock currently sports a Zacks Rank of 1.
Over the past 60 days, Ally Financial’s earnings estimates for the current year have been revised 1.3% upward. The company’s shares have increased 4.4% in the past two years. The stock currently has a Zacks Rank #2.
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