On Sep 19, 2013, we upgraded our long-term recommendation on
) to Outperform. Our decision rests on the company's impressive
second-quarter earnings. Moreover, the company is conveniently
positioned to grow both organically and inorganically based on
its healthy liquidity levels.
The Rationale Behind the Upgrade
On Jul 24, BankUnited reported second-quarter 2013 earnings per
share of 52 cents, substantially beating the Zacks Consensus
Estimate of 43 cents. Results were primarily driven by growth in
net interest income and a decline in operating expenses,
partially offset by lower non-interest income. Further, growth in
loan and deposit balances was the tailwind for the quarter.
The Zacks Consensus Estimate for 2013 advanced 10.6% to $1.88 per
share over the last 60 days. Further, for 2014, the Zacks
Consensus Estimate increased 8.3% to $1.82 per share over the
same time period. Hence, BankUnited currently carries a Zacks
Rank #1 (Strong Buy).
BankUnited is an attractive pick for yield-seeking investors.
Earlier, in Feb 2012, the company had raised its cash dividend by
21% to 17 cents. Moreover, given the company's strong capital and
balance sheet levels, it is well positioned to expand organically
as well as through acquisitions. Further, management intends to
set up additional branches in the New York metropolitan market
through the remainder of 2013.
Robust capital deployment plans and increasing emphasis on the
commercial loan portfolio will prove accretive to BankUnited's
overall growth going forward. The company is well poised from the
capital perspective as well. We expect BankUnited to continue
building capital with the help of its earnings in order to meet
the increasingly stringent capital requirements.
Other Stocks Worth Considering
Other banks worth a look include
German American Bancorp Inc.
Tower Financial Corporation
). All these stocks carry the same Zacks Rank as BankUnited.
BANKUNITED INC (BKU): Free Stock Analysis
FIRSTBANK ALMA (FBMI): Free Stock Analysis
GERMAN AMER BCP (GABC): Free Stock Analysis
TOWER FINANCIAL (TOFC): Free Stock Analysis
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