On Aug 19, Zacks Investment Research upgraded Home Loan Servicing Solutions, Ltd. (HLSS) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Home Loan Servicing has been witnessing rising earnings estimates on the back of rise in dividend, strong second-quarter 2014 results, which included improved revenues and a steady capital position. The present long-term expected earnings growth rate for the company is 8.5%. Further, the company witnessed positive earnings surprise in all the trailing four quarters, with an average beat of 18%.
Home Loan Servicing reported second-quarter results on Jul 17 with earnings per share coming in at 76 cents, comfortably beating the Zacks Consensus Estimate of 55 cents. The figure also came in much higher than 48 cents earned in the year-ago quarter.
Robust results were primarily driven by strong top-line growth, partially offset by higher operating expenses.
On Aug 12, 2014, the mortgage investment company increased its dividend per common share to 18 cents from 16 cents, for the months of August and September.
Over the last 30 days, the Zacks Consensus Estimate for 2014 increased 9.2% to $2.49 per share. For 2015, the Zacks Consensus Estimate inched up 0.9% to $2.31 over the same time period.
Other Stocks to Consider
Apart from Home Loan Servicing, other mortgage investment firms worth considering include Essent Group Ltd. (ESNT), JGWPT Holdings Inc. (JGW) and PennyMac Financial Services, Inc. (PFSI). While Essent Group sports a Zacks Rank #1 (Strong Buy), both JGWPT Holdings and PennyMac Financial carry a Zacks Rank #2 (Buy).
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