On Jan 13, 2014, we upgraded our recommendation on
BOK Financial Corp.
) to Neutral from Underperform. The revision was based on the
company's endeavors to diversify its portfolio and its steady
capital deployment activities.
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We commend BOK Financial's diversifying efforts. Over the past
several years, from being merely a bank in Oklahoma, the company
has emerged as a chief financial service provider. Overall, BOK
Financial operates in economically diverse markets comprising the
Southwest, Midwest and Rocky Mountain states. Notably, 62% of BOK
Financial's consolidated net income for the third quarter of 2013
was derived from overseas markets.
BOK Financial is an asset for yield-seeking investors due to its
healthy capital levels and consistent capital deployment
activities. Additionally, the company chose not to participate in
the Treasury's Capital Purchase Program as its own capital levels
were adequate for its operations and expansion.
Apart from having a strong capital position, the company is
committed to increasing shareholders' wealth through dividend
hikes and share repurchases. Notably, since 2005, the company has
announced a dividend hike every year till 2013 with the latest
hike of 5% in Oct 2013.
However, stringent regulations with regard to capital
requirement, liquidity and leverage ratio are expected to limit
BOK Financial's ability to exploit business opportunities.
For BOK Financial, the Zacks Consensus Estimate remained stable
at $4.62 and $4.39 per share for 2013 and 2014, respectively,
over the last 60 days. Hence, the company now carries a Zacks
Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked stocks in the banking sector include
Waddell & Reed Financial, Inc.
First Interstate Bancsystem Inc.
). All these sport a Zacks Rank #1 (Strong Buy).