What Other Than Organic Growth Drive M&T Bank (MTB) Stock?

On Feb 26, we issued an updated research report on M&T Bank Corporation (NYSE:MTB) . The Buffalo, NY-based banking giant’s prospects look encouraging as it continues to display robust organic growth and remains committed to enhance shareholders’ value through impressive capital deployment activities.

M&T Bank’s consistent organic growth keeps us encouraged. Over the last five years (ended 2017), it has witnessed a compound annual growth rate (CAGR) of nearly 9%. M&T Bank operates as a solid and sustainable regional bank franchise with a footprint that spans across seven Mid-Atlantic States as well as D.C. This will allow the company to continue generating a decent level of interest income in the upcoming quarters. Notably, with continually rising rates, margin pressure also seems to be easing, aiding revenue growth.

M&T Bank’s loan portfolio has been rising consistently over the last few years. It recorded a five-year CAGR of 8.1% (ended 2017). Further, with lower tax rates and improving economy, the bank’s lending activities are expected to improve. Also, its liquidity position remains strong as indicated by rising deposit balance.

Notably, M&T Bank’s strong capital position keeps it well poised to undertake opportunistic expansion moves. Also, it allows the company to enhance shareholders’ value through share buybacks and dividend increases. It recently announced an additional share buyback plan of up to $745 million. Also, it expects to raise common stock dividend in the range of 5 cents to 80 cents per share in the second-quarter 2018. Moreover, M&T Bank’s favorable debt/equity ratio when compared to the broader industry along with consistent performance indicate that these dividend hikes are sustainable.

Shares of M&T Bank have gained 28.5% over the past six months, outperforming 22.1% growth recorded by the industry.

Over the last 30 days, the Zacks Consensus Estimate has been raised nearly 1% and 1.3% to $12.20 and $13.08 for 2018 and 2019, respectively.

M&T Bank sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other stocks in the same space are Comerica Incorporated (NYSE:CMA) , Citigroup (NYSE:C) and Northern Trust Corporation (NASDAQ:NTRS) , each carrying a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Comerica has been revised 17.7% upward for the current year in the last 60 days. The company’s share price has increased 39.8% in the past year.

Citigroup has witnessed 6.8% upward earnings estimate revision for 2018 in the last 60 days. Its share price has soared 29.8% in the past year.

Northern Trust’s shares have gained 24.6% in a year. Its earnings estimates for 2018 have moved up 10.3% in the last 60 days.

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