Hancock Whitney Corporation HWC stock looks like a good investment option right now. Supported by the continued rise in loan balances and its inorganic growth efforts, the company’s revenues are anticipated to keep improving in the near term. Its efficient capital deployment activities reflect a solid balance sheet position.
Moreover, analysts seem to be optimistic regarding the company’s earnings growth prospects. Over the past 30 days, the Zacks Consensus Estimate for HWC’s current-year earnings has moved 1.4% upward. The company currently carries a Zacks Rank #2 (Buy).
Looking at its price performance, shares of the company have gained 72% over the past year compared with 46.7% growth recorded by the industry.
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A few factors that make Hancock Whitney stock an attractive pick right now are mentioned below.
Key Factors to Note
Earnings Strength: Hancock Whitney’s earnings witnessed a rise of 7.9% over the last three to five years. In 2019, the company acquired MidSouth Bancorp, which continues to be accretive to earnings. With the company’s continued strategic investments in growth and new markets, the upward momentum is likely to persist in the near term.
In 2021, Hancock Whitney’s earnings are projected to increase significantly. Also, the company has an impressive earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters.
Revenue Growth: Supported by a rise in loans, the company’s revenues (on a tax-equivalent basis) witnessed a compound annual growth rate (CAGR) of 7.9% over the past six years (2015-2020). The upward trend in revenues continued in the first nine months of 2021 as well.
For 2021, the company’s top line is projected to grow 2.7%.
Solid Capital Deployment Actions: Hancock Whitney’s capital deployment plans seem impressive, through which it is expected to keep enhancing shareholder value. In 2018, the bank hiked quarterly dividends by 12.5% and has maintained that level since then. While share repurchases were suspended last year in response to the coronavirus-led concerns, the company authorized the repurchase of up to 4.3 million shares this April. As of Sep 30, 2021, 4.1 million shares remained under the authorization (set to expire on Dec 31, 2022).
Strong Leverage: Currently, Hancock Whitney has a debt/equity ratio of 0.07. This compares favorably with the industry average of 0.14. Given the relatively low debt/equity ratio than its peers, the company is expected to be financially stable, even in adverse economic conditions.
Superior Return on Equity (ROE): Hancock Whitney’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholder funds compared with its peers. The company has an ROE of 12.59%, higher than the industry average of 11.91%.
Favorable Valuation: Hancock Whitney stock looks undervalued right now when compared with the broader industry. Its current price/earnings (P/E) and price/sales (P/S) ratios are below the respective industry averages.
It has a P/E (F1) ratio of 9.94, lower than the industry average of 11.49. Its P/S ratio of 3.15 compares with the industry average of 3.21.
Other Stocks Worth Considering
A few other top-ranked stocks from the finance space are Popular, Inc. BPOP, The Charles Schwab Corporation SCHW and Home Bancorp, Inc. HBCP. While Popular currently sports a Zacks Rank #1 (Strong Buy), Schwab and Home Bancorp carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Popular’s current-year earnings has moved 9.2% upward over the past 60 days. The BPOP stock has gained 61.6% in the past year.
Schwab’s 2021 earnings estimates have been revised upward by 2.2% over the past 60 days. SCHW’s shares have rallied 60.1% in the past year.
Earnings estimates for Home Bancorp have moved 14% upward over the past 60 days. The HBCP stock has appreciated 44.3% in the past year.
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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
Popular, Inc. (BPOP) : Free Stock Analysis Report
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