One Bank Is Beating the Sector Slump. Here's Why an Analyst Likes It.
A StockStory analysis argues bank investors should look past the sector's 1.3% six-month slide — and makes the case for one regional lender while passing on two others.
Bank stocks are having a rough year, and investors are nervous. Banking stocks have collectively shed 1.3% over the past six months — a sharp contrast to the S&P 500's 9.7% climb — as the industry contends with credit quality worries and the prospect of regulatory changes, according to a StockStory analysis reported by Yahoo Finance.
But one outlet argues the gloom is overdone for at least one lender. Here's its case — one buy, two to skip.
The buy: Nicolet Bankshares
StockStory's pick is Nicolet Bankshares (NYSE: NIC), a $3.45 billion regional bank serving Wisconsin, Michigan, and Minnesota. Founded as Green Bay Financial Corporation in 2000 and rebranded in 2002, Nicolet has posted 24.8% annual net interest income growth over the past five years, expanded its net interest margin by 69 basis points over the last two years, and delivered 26.2% annual earnings-per-share growth over the last two years — outpacing its revenue growth. The stock trades at $163.94, about 1.4 times forward price-to-book.
The passes: Provident and First Financial
The analysis passes on Provident Financial Services (NYSE: PFS), a $2.90 billion lender serving New Jersey, Pennsylvania, and New York since 1839. Its 3.4% net interest margin ranks among the industry's worst, five-year EPS growth of 2.1% a year lagged revenue gains, and tangible book value per share has been flat for five years. Shares sit at $22.20, roughly 1x forward price-to-book.
Also skipped: First Financial Bancorp (NASDAQ: FFBC), a $3.30 billion commercial bank with roots stretching back to the Civil War era. Its 9.3% annual net interest income growth over five years trailed peers, EPS growth of 9% a year ran below the peer average, and estimated tangible-book-value-per-share growth of 10.7% over the next 12 months implies slowing profitability, per the analysis. The stock trades at $31.41, about 1x forward price-to-book.
One caveat: the piece closes with a pitch for the outlet's "Top 6 Stocks for This Week" list, touting past picks — readers should treat stock-pick marketing with the usual skepticism.
Written by the BidAsk Newsroom. Based on reporting from the sources below.
