Despite the continued concerns related to the pandemic, it seems to be a wise idea to add Guaranty Bancshares, Inc. GNTY stock to your portfolio now, given the company’s fundamental strength and good growth prospects.
Moreover, it has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1% upward over the past 30 days, while that for the next year has been revised upward by 1.4%. Thus, it currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 12.2% over the past three months against the industry’s decline of 0.5%.
Mentioned below are some other factors that make Guaranty Bancshares stock an attractive investment option now.
Earnings per Share (EPS) Growth: The company witnessed EPS growth of 23.9% in the last three to five years, higher than the industry average of 12.9%. While its earnings are projected to decline 6.2% in 2020, the trend will likely reverse after that. In 2021, earnings are expected to grow 3.3%.
Revenue Strength: Guaranty Bancshares’ revenues witnessed a compounded annual growth rate (“CAGR”) of 12.8% over the last five years (2015-2019). The uptrend in revenues is expected to continue in the near term as reflected by the company’s projected sales growth rate of 15.6% for the current year.
Superior Return on Equity (ROE): Guaranty Bancshares’ ROE is 12.29% compared with the industry average of 7.89%. This indicates that it reinvests its cash more efficiently than the industry.
Favorable Valuation: The company seems to be trading at a discount with respect to its price/cash flow (P/CF) ratio. Currently, it has a P/CF ratio of 8.31, which is below the industry average of 8.75. Also, the stock has a Value Score of B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Strong Leverage: Currently, the company has a debt/equity ratio of 0.47, below the industry average of 0.52. This shows that it will be more financially stable compared to its peers even in adverse economic conditions.
Other Stocks Worth Considering
Moody’s Corporation MCO has witnessed an upward earnings estimate revision of 2.4% for the current year over the past 60 days. Its shares have gained 3.4% over the past three months. The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Interactive Brokers Group, Inc.’s IBKR earnings estimate has been revised 2.3% upward for the current year over the past 60 days. Over the past three months, the Zacks Rank #2 stock has gained 5.9%.
LPL Financial Holdings Inc.’s LPLA earnings estimate for the current year has been unchanged over the past 60 days. Its shares have witnessed a rise of 5.4% over the past three months. The company currently carries a Zacks Rank #2.
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Moodys Corporation (MCO): Free Stock Analysis Report
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Guaranty Bancshares Inc. (GNTY): Free Stock Analysis Report
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