ViewPoint Financial Group, Inc.
) recently delivered its 7th consecutive positive earnings
surprise, driven by strong loan growth and an expanding net
Analysts revised their estimates higher, sending the stock to a
Zacks #2 Rank (Buy). On top of solid earnings growth, the company
pays a dividend that yields a 1.6%. Valuation is attractive too,
with shares trading at just 1.2x book value.
ViewPoint Financial Group owns ViewPoint Bank, which operates 31
branches in the Dallas/Fort Worth area.
It was founded in 1952 and has a market cap of $485 million.
First Quarter Results
ViewPoint Financial delivered better-than-expected first quarter
results on April 26. Earnings per share came in at 22 cents,
beating the Zacks Consensus Estimate by 2 cents. It was a 10%
increase over the same quarter in 2011.
Net interest income rose 24% year-over-year to $23.5 million. The
net interest margin jumped 50 basis points over the same period to
3.30%. Loan growth was strong, with total loans rising 40% to
$1.973 billion. Most of this growth can from higher margin
Net charge-offs declined from $448 million to $359 million, which
contributed to a decrease in loan loss provisions for the quarter.
The percentage of non-performing loans to total loans did increase
29 basis points, however, to 1.79%.
Following ViewPoint's solid Q1 results, analysts revised their
estimates significantly higher for both 2011 and 2012, sending the
stock to a Zacks #2 Rank (Buy).
The Zacks Consensus Estimate for 2012 is now $0.89, representing
10% growth over 2011 EPS. The 2013 consensus estimate is currently
$0.96, corresponding with 8% growth.
The company has delivered 7 consecutive positive earnings
In addition to strong earnings growth, the company pays a dividend
that yields a solid 1.6%. ViewPoint did cut its dividend during the
financial crisis, but it has raised it twice since then.
If the company can continue to grow its bottom line, then look for
more dividend hikes down the road.
Valuation looks attractive with shares trading at just 1.2x book
value, in-line with the industry median, and a discount to its
historical multiple of 1.8x.
The Bottom Line
With strong earnings momentum, solid growth projections, a 1.6%
yield and reasonable valuation, ViewPoint Financial Group offers
attractive total return potential.
Todd Bunton is the Growth & Income Stock Strategist for
and Editor of the
Income Plus Investor service
VIEWPOINT FINL (VPFG): Free Stock Analysis
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