Commerce Bancshares ' CBSH stock seems to be a promising pick right now, given its impressive revenue growth trend, and rising deposit and loan balances. Moreover, easing margin pressure, supported by the improvement in the interest-rate scenario, is expected to aid top-line growth.
A strong capital position supports the company's capital deployment activities.
Further, the company's Zacks Consensus Estimate for current-year earnings has been revised 1.1% upward over the past 30 days, reflecting analysts' optimism regarding its earnings growth potential. As a result, the stock currently sports a Zacks Rank #1 (Strong Buy).
The company's share price performance looks impressive. The stock has gained 17.3% so far this year, outperforming the industry
's rally of 10.1%. Given the strong fundamentals and solid Zacks Rank, we expect this price performance to improve further.
Here are a few other factors that make Commerce Bancshares an attractive investment option right now: Revenue Growth
: Organic growth remains a key strength for Commerce Bancshares, as reflected by its revenue growth story. Revenues witnessed a CAGR of 4.9% over the last four years (2014-2017). Moreover, a consistent improvement in non-interest income, along with impressive loan and deposit balances, indicates chances of robust revenue generation in the future.
Notably, the company's projected sales growth of 5.6% for 2018 and 4.2% for 2019 ensures the continuation of uptrend in revenues. Earnings per Share (EPS) Strength
: Commerce Bancshares' earnings increased 5.3% in the last three-five years. This positive trend is expected to continue in the near term, as evident from its projected EPS growth rate of 30.3% for 2018 and 4% for 2019.
Moreover, the company's long-term (three-five years) expected EPS growth rate of 9.2% promises rewards for shareholders. Steady Capital Deployment
: Commerce Bancshares has impressive capital deployment activities. The company has been consistently paying a 5% stock dividend for more than a decade now. Apart from this, it pays regular quarterly cash dividends and has a share repurchase program in place. This underlines the company's commitment to return value to shareholders. Strong Leverage
: Commerce Bancshares' debt/equity ratio currently stands at 0.00, which shows that the company is not using any debt to finance its operations. However, the debt/equity ratio of the industry is valued at 0.46, which shows that the company has a lower debt burden than the industry. This also reflects its relatively strong financial health that is expected to help it perform better than its peers, even in dynamic business conditions. Superior Return on Equity (ROE)
: Commerce Bancshares' ROE of 13.21% is higher than the industry average of 9.58%. This reflects the company's commendable position over its peers, in terms of utilizing shareholder funds. Other Stocks to Consider
Some other top-ranked stocks from the same space are Associated Banc-Corp ASB
, Civista Bancshares, Inc. CIVB
and Old Second Bancorp, Inc. OSBC
In the last 60 days, Associated Banc-Corp currently sports a Zacks Rank #1. It has witnessed an upward earnings estimate revision of 10.7% for 2018. Its share price has increased 13.1% in the past 12 months.
Over the past 60 days, Civista Bancshares' Zacks Consensus Estimate has been revised 8.8% upward for the current year. The company's share price has increased 19.3% in the past year. It currently flaunts a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here
Old Second Bancorp currently carries a Zacks Rank #2 (Buy). In the last 60 days, the company has witnessed an upward earnings estimate revision of 5.7% for 2018. Its shares have rallied 29.5% in the past 12 months. The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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 report Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report Old Second Bancorp, Inc. (OSBC): Free Stock Analysis Report Associated Banc-Corp (ASB): Free Stock Analysis Report Civista Bancshares, Inc. (CIVB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research