Despite the volatility in the financial sector, many investors still remain curious about opportunities within this category. And with good reason as there are companies that have continued to thrive by running fiscally sound operations. Knowing we wanted to uncover financial stocks that appear to be well positioned for growth, we ran a scan to find those that have minimal long-term debt. Too much debt can undermine growth and send a shaky message to investors. From there we found companies with impressive projected EPS growth rates for the coming year. Use the data and graphs below to start your own assessment. We think you will find the financial stocks listed below rather interesting.
The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for financial stocks. Next, we then screened for businesses that operate with little to no debt (D/E Ratio<.1). We then looked for companies that have high future earnings per share growth forecasts (1-year projected EPS Growth Rate>25%). We did not screen out any market caps.
Do you think these stocks are worth more than their current valuations? Use this list as a starting-off point for your own analysis.
1) First Connecticut Bancorp, Inc. (FBNK)
|Industry||Money Center Banks|
|1-Year Projected Earnings Per Share Growth Rate||47.62%|
First Connecticut Bancorp, Inc. operates as the holding company for Farmington Bank that provides consumer and commercial banking services to businesses, individuals, and governments in central Connecticut. The company offers a range of deposit instruments. It also provides various loans, such as one-to-four family residential real estate loans; commercial real estate loans; construction loans; commercial loans; home equity loans and home equity lines of credit secured by owner-occupied one-to-four family residences; and consumer loans. As of May 25, 2012, it operated 18 branch locations in central Connecticut. The company was founded in 1851 and is based in Farmington, Connecticut.
2) KBW Inc. (KBW)
|1-Year Projected Earnings Per Share Growth Rate||1814.29%|
KBW, Inc., through its subsidiaries, operates as an investment bank specializing in the financial services industry in the United States, Europe, and Asia. It provides various investment banking services that include mergers and acquisitions, and other strategic advisory services, such as advisory services relating to mergers, acquisitions, divestitures, hostile takeover defenses, and special committee assignments; capital raising services comprising acting as an underwriter and placement agent in public and private offerings of equity and debt securities; equity and fixed income securities offerings; and mutual thrift conversions, as well as equity and fixed income sales and trading services. The company also offers research services. It serves bank and thrift holding companies, banks and thrifts, insurance companies, broker-dealers, mortgage banks, asset management companies, mortgage and equity real estate investment trusts, consumer and specialty finance firms, financial processing companies, and securities exchanges. The company was founded in 1962 and its headquarters is in New York, New York.
3) Crescent Financial Bancshares, Inc. (CRFN)
|Industry||Regional - Mid-Atlantic Banks|
|1-Year Projected Earnings Per Share Growth Rate||80.00%|
Crescent Financial Bancshares, Inc. operates as the bank holding company for Crescent State Bank that provides commercial and retail banking services to individuals and small-to-medium sized businesses in North Carolina. Its deposit products include non-interest bearing checking accounts, interest bearing checking accounts, savings accounts, money market accounts, and certificates of deposit. The company's loan portfolio comprises real estate mortgage and construction loans; and small business administration guaranteed loans; commercial mortgage loans; and commercial loans, including secured loans for working capital, expansion, and other business purposes.
It also offers consumer loans; home equity lines of credit; residential real estate loans; and credit cards. In addition, the company provides on-line banking and bill paying, on-line check images, wire transfers, ACH originations, and stop payment orders of checks services, as well as investment and courier services. As of August 2, 2011, it operated 15 banking offices in Cary, Apex, Clayton, Holly Springs, Southern Pines, Pinehurst, Sanford, Garner, Raleigh, Wilmington, and Knightdale, North Carolina. The company was formerly known as Crescent Financial Corporation and changed its name to Crescent Financial Bancshares, Inc. in November 2011. Crescent Financial Bancshares, Inc. was founded in 1998 and its headquarters is in Cary, North Carolina. Crescent Financial Bancshares, Inc. operates as a subsidiary of Piedmont Community Bank Holdings, Inc.
Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/13/2012.