This Emerging And Expanding Regional Bank Powerhouse Belongs On Your Watch List

Aug.28.12 | About: BB&T Corporation (BBT)

Expanding regional bank powerhouse BB&T Corp. (NYSE:BBT) has been in the news a lot over the last week or so. The bank weathered the financial crisis better than most of the industry and looks intent to continue to expand its presence into new markets. For investors looking for a financial company that provides growth, a decent dividend yield, and strong management at reasonable valuations, the stock could be a good fit.

Here are some key recent positives for BB&T:

  • It closed the acquisition of BankAtlantic, which gave it an expanded presence in fast-growing Florida. It also could be on the lookout for more cheap deals in the state.
  • It paid back the federal government recently and exited the TARP program successfully.
  • It garnered a nice mention in this week's Barron's as one of the core positions of the approximately $3.8 billion Mainstay ICAP Select Equity (MUTF:ICSRX) Fund. Jerrold Senser, the fund's manager, believes the shares could appreciate 20% over the next 12-18 months as it continues to expand and take loan market share from its challenged larger brethren, like Bank of America (NYSE:BAC).

According to the business description on Yahoo Finance, "BB&T Corporation operates as a financial holding company for Branch Banking and Trust company that provides various banking and trust services for retail and commercial clients."

Here are four reasons why BBT is a solid pick at just over $31 a share:

  1. The company sports an A- rated balance sheet and yields 2.6%.
  2. BB&T has beat earnings estimates for six straight quarters, and consensus earnings estimates for both FY 2012 and FY 2013 have been revised up in the last two months.
  3. Earnings are certainly going in the right direction. BBT earned $1.83 a share in FY 2011 and is on track for $2.76 a share in earnings in FY 2012. Analysts currently project $3.04 of EPS in FY 2013.
  4. BB&T is one of the rare banks that sport a five-year projected PEG of under 1 (.95) and sells at just 7 times operating cash flow.

Disclosure: I am long BAC and I also may initiate a long position in BBT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.