Underlying strength and earnings growth prospects make Eagle Bancorp (NASDAQ:EGBN) a solid bet now. The company’s organic growth strategies have positioned it well for growth. Also, improving credit quality and solid balance sheet are major positives.
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 2017 earnings has been revised 2.5% upward to $3.33. As a result, it currently carries a Zacks Rank #2 (Buy).
Also, the stock has gained 10.3% year to date, as against the industry’s decline of 2.8%.
Key Driving Factors
Earnings Strength: Eagle Bancorp recorded earnings growth of 17.7% over the last three to five years. Retaining the earnings momentum, the earnings growth rate for the current year is anticipated at 16.4% compared with the industry average of 10.5%. Further, the company delivered average positive earnings surprise of 6% over the trailing four quarters.
Impressive Balance Sheet Growth: The company’s loans and deposits have witnessed a compounded annual growth rate (CAGR) of 22.8% and 21.8%, respectively, over a five-year period (ended 2016). This keeps Eagle Bancorp well poised for any opportunistic acquisitions in the future.
Revenue Growth: The company continues to make consistent progress toward driving sales. Revenues have recorded five-year (ended 2016) CAGR of around 17.7%. Further, revenues are likely to rise 8.4% in 2017 and 11.6% in 2018.
Improved Credit Quality: Eagle Bancorp’s credit quality has improved significantly over the years. In 2016, net-charge offs and non-performing assets declined nearly 41% and 43%, respectively, from the 2012 level.
Superior Return on Equity: The company has a return on equity of 12.37% compared with the industry average of 8.79%. This indicates that the company reinvests more efficiently compared to its peers.
Strong Leverage: Eagle Bancorp has a debt/equity ratio of 0.23 compared with the industry’s 0.52. It highlights the company’s financial flexibility.
Other Stocks to Consider
Some other top-ranked stocks in the space are Washington Federal (NASDAQ:WAFD) , First Commonwealth Financial Corporation (NYSE:FCF) and BCB Bancorp (NASDAQ:BCBP) . All the stocks carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Washington Federal’s earnings estimates were revised around 1% upward for 2017 in the last 60 days. Also, its share price has risen 6% over the past six months.
First Commonwealth Financial’s earnings estimates for 2017 have been revised 2.5% upward over the last 60 days. Further, in the past six months, the company’s shares have gained 15%.
BCB Bancorp witnessed a 10.8% rise in earnings estimates for the current year over the last 60 days. Moreover, year to date, its shares have rallied 11.1%.
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Eagle Bancorp, Inc. (EGBN): Free Stock Analysis Report
Washington Federal, Inc. (WAFD): Free Stock Analysis Report
First Commonwealth Financial Corporation (FCF): Free Stock Analysis Report
BCB Bancorp, Inc. (NJ) (BCBP): Free Stock Analysis Report
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