Improving operating backdrop, rising rate environment and easing of regulations, along with the strengthening of the domestic economy, should keep supporting the performance of banking stocks. Therefore, we bring one such stock - Lakeland Financial CorporationLKFN - which continues to indicate strong fundamentals and improving prospects.
A positive trend in estimate revisions also reflects optimism on the company's earnings growth prospects. The Zacks Consensus Estimate for Lakeland Financial's 2018 and 2019 earnings have witnessed marginal rise over the past 30 days. As a result, the stock currently carries a Zacks Rank #2 (Buy).
Further, the stock has gained 4.9% over the past three months, outperforming the industry 's rally of 4.7%.
Here are the key factors that make Lakeland Financial an attractive investment option:
Revenue Strength: Lakeland Financial's revenues recorded a compound annual growth rate (CAGR) of 11.2% over the last four years (2014-2017). Further, the top line is expected to grow 10.7% in 2018, higher than the industry average of 6.5%.
Earnings Growth: Lakeland Financial witnessed earnings growth of 11% in the last three to five years. This earnings momentum is likely to continue in the near term as reflected by the company's projected earnings per share (EPS) growth rate (F1/F0) of 25.5%.
Further, the company's long-term (three to five years) estimated EPS growth rate of 10% promises rewards for investors in the long run. Also, it recorded an average positive earnings surprise of 3.5% over the trailing four quarters.
Balance Sheet Growth: The company's loans and deposits have witnessed a CAGR of 11.4% and 11.7%, respectively, over a four-year period (ended 2017). This makes the company well poised for opportunistic expansions in the future.
Strong Leverage: Lakeland Financial's debt/equity ratio is valued at 0.07 compared with the industry's average of 0.46, thus, displaying lower debt burden relative to the industry. This, in turn, reflects the company's relatively strong financial health, which will help it perform better than its peers under a dynamic business environment.
Superior Return on Equity (ROE): The company's ROE of 14.09% compared with the industry average of 9.58% reflects Lakeland Financial's commendable position over its peers.
Other Stocks to Consider
A few other top-ranked stocks in the same space are Associated Banc-Corp ASB , Commerce Bancshares, Inc. CBSH and First Merchants Corporation FRME , each carrying a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
In the last 60 days, the Zacks Consensus Estimate for Associated Banc-Corp has been revised 1% upward for the current year. The stock has rallied 8.5% in six months' time.
Commerce Bancshares' earnings estimates for 2018 have been revised upward marginally over the last 60 days. Its share price has increased 15.9% during the past six months.
First Merchants witnessed upward earnings estimate revision of 2% for 2018 in the last 30 days. Its share price has increased 11.2% in the past six months.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportCommerce Bancshares, Inc. (CBSH): Free Stock Analysis ReportFirst Merchants Corporation (FRME): Free Stock Analysis ReportAssociated Banc-Corp (ASB): Free Stock Analysis ReportLakeland Financial Corporation (LKFN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research