On Sep 9, 2014, we issued an updated research report on CIT Group Inc. (CIT). Backed by its strong liquidity position and stabilizing balance sheet, the company has been expanding through acquisitions.
CIT Group has come a long way since its emergence from bankruptcy in 2009. The company is presently focused on growing inorganically. In July, the company announced a deal to acquire OneWest for nearly $3.4 billion. Following the completion of this deal, CIT Group will assume approximately $23 billion in assets and $15 billion in deposits. Hence, it will become a $50 billion-plus company (total assets to be nearly $67 billion). Further, in August, the company completed the acquisition of Capital Direct Group.
Additionally, CIT Group is an asset for yield-seeking investors. The company recently announced a 50% hike in its quarterly dividend to 15 cents per share. Moreover, the company has an active share buyback plan in place. We believe that given its strong capital position, CIT Group will continue enhancing shareholders’ value.
On the flip side, sluggish growth in the industries where CIT Group provides finance, along with stringent regulations, are expected to dent the company’s financial performance in the upcoming quarters.
Further, over the last 60 days, estimate revisions have been mixed. The Zacks Consensus Estimate for both 2014 has advanced 12.7% to $3.63 per share, while for 2015 it has declined 3.1% to settle at $3.70 per share.
Presently, CIT Group has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked finance stocks include Arlington Asset Investment Corp. (AI), Moelis & Company (MC) and Piper Jaffray Companies (PJC). All these stocks sport a Zacks Rank #1 (Strong Buy).
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