Here's Why BB&T Stock is an Attractive Investment Option

A generic image of a pen, a calculator and sheets Credit: Shutterstock photo

It seems to be a wise decision to add BB&T corporationBBT stock to your portfolio now, given the company's sound organic and inorganic growth strategies. Also, its efforts to diversify non-interest revenues bode well for long term. Further, its underlying strength, earnings growth prospects and efforts to enhance shareholders value are encouraging.

Analysts seem to be optimistic about the company's prospects as the stock has been witnessing upward estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2018 earnings has been revised slightly upward to $3.99. As a result, it currently carries a Zacks Rank #2 (Buy).

Over the past three months, the stock has lost 9.4% compared with 17,3% decline of the industry it belongs to.Nevertheless, given the upward estimate revisions and a solid Zacks Rank, the stock is expected to gain in the future.

Factors That Make BB&T Worth Betting on

Earnings growth: BB&T witnessed earnings growth of 4.78% over the past three to five years. This earnings momentum is likely to continue in the near term as reflected by the projected earnings per share growth of 43% for 2018 and 9.5% for 2019.

Moreover, BB&T has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 2.7%.

Further, the long-term (three-five years) projected earnings growth rate of 10.5% promises rewards for shareholders.

Revenue strength: BB&T's revenues witnessed a CAGR of 3% over the last five years (2012-2017). Further, the company has been witnessing a steady improvement in net interest margin over the last several years.

Additionally, BB&T remains focused on growth of non-interest revenue sources, as these are less susceptible to the volatility of capital markets. Further, the company seeks to build client relationships by emphasizing more on the large corporate segment.

Notably, management expects revenues (tax-equivalent basis) to grow in the 1-3% range year over year in 2018.

Efficient capital deployment plan: The company has significantly improved its balance sheet and fundamentals. Its 2018 capital plan (approved by the Federal Reserve) included a 8% dividend hike and $1.7 billion share repurchase authorization. Given the capital strength and solid liquidity position, the company will likely be able to sustain improved capital deployments.

Strong leverage: BB&T's debt/equity ratio is 0.86 compared with the industry average of 0.94. The relatively strong financial health of the company will help it perform better than its peers under a dynamic business environment.

Favorable VGM Score : BB&T has a VGM Score of B. Our research shows stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.

Other Stocks to Consider

Bank of Marin Bancorp BMRC has witnessed slight upward estimate revisions for 2018 for the past 60 days. Additionally, the stock has jumped more than 20% in the past year. It currently carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Old Second Bancorp, Inc.'s OSBC estimates have been stable for 2018 over the past 60 days. Also, the company's shares have risen nearly 22% over the past two years. It holds a Zacks Rank of 2, at present.

First Financial Bankshares, Inc.'s FFIN estimates have been stable for 2018 for the past 60 days. In two year's time, this Zacks #2 Ranked company's share price has been up more than 20%.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

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

BB&T Corporation (BBT): Free Stock Analysis Report

Old Second Bancorp, Inc. (OSBC): Free Stock Analysis Report

First Financial Bankshares, Inc. (FFIN): Free Stock Analysis Report

Bank of Marin Bancorp (BMRC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.