3 Reasons That Make Community Trust (CTBI) A Solid Pick Now
Zacks Investment Research | Jun 19, 2017 09:08PM ET
The approval of the Financial Choice Act will likely bring respite to banks that were struggling with stringent regulations for long. Moreover, the operating environment appears favorable for banks. Consequently, betting on bank stocks could be profitable now. Among others, Community Trust Bancorp, Inc. (NASDAQ:CTBI) , with robust fundamentals and growth opportunities, is likely to perform well in the near term.
Community Trust’s shares have rallied 24.7% over the last one year, underperforming 43.2% gain for the Zacks categorized Banks - Southeast industry. However, it carries a Zacks Rank #2 (Buy), indicating a decent upside.
Why Community Trust is a Solid Pick
Revenue Growth: The company continues to make steady progress toward improving its top line, with sales recording a three-year compounded annual growth rate of around 1.6% during 2014–2016.
Further, the Community Trust’s projected sales growth (F1/F0) of 3.5% compares favorably with the industry average of 2.1%.
Superior Return on Equity (ROE): Community Trust’s ROE of 9.40% compares with the industry average of 8.17%, reflecting the company’s ability to generate better earnings from investments.
Stock Looks Undervalued: The stock looks undervalued with respect to its price-to-earnings (P/E) and price-to-book (P/B) ratios. It has a trailing 12-month P/E ratio of 16.52, compared with the industry average of 18.27. Moreover, the company’s P/B ratio of 1.54 is below the industry average of 1.91.
Other Stocks to Consider
Some other stocks worth considering in the financial space include Comerica Incorporated (NYSE:CMA) , M&T Bank Corporation (NYSE:MTB) and Lakeland Bancorp, Inc. (NASDAQ:LBAI) . All these stocks hold a Zacks Rank #2. You can see .
Comerica has witnessed an upward earnings estimate revision of 8.8% for the current year in the past 60 days. Also, its shares have rallied 78.4% over the last one year.
M&T Bank’s earnings estimates have been revised upward by 2.4% for the current year, in the past 60 days. Also, over the last one year, its shares have gained 40.8%.
Lakeland has witnessed an upward earnings estimate revision of 2.8% for the current year, in the past 60 days. Also, its shares have jumped 75.0%, over the last one year.
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