Yahoo Finance 6 Reasons to Add State Street (STT) Stock to Your Portfolio Now
At present, banking sector is news for all the right reasons. The possibility of another rate hike in the near future continues to dominate the headlines.
Further, banking stocks are showing resilience and confronting the macro issues upfront. So, we thought of bringing up a stock from the sector that reflects strong fundamentals, upbeat outlook and solid long-term growth opportunity.
State Street Corporation STT is one such major regional bank, with a market capitalization of $27.6 billion. In the recently concluded quarter, the company’s earnings outpaced the Zacks Consensus Estimate. Moreover, State Street has an impressive earnings surprise history. You can see that in the chart below:
STATE ST CORP Price and EPS Surprise
STATE ST CORP Price and EPS Surprise | STATE ST CORP Quote
Further, State Street has a number of other aspects that make it an attractive investment option.
Revenue Strength: State Street has been witnessing consistent improvement in revenues. Over the past five years (2011–2015), total revenues recorded a CAGR of 2%. Continuous investment in new products, new business wins and the GE Asset Management acquisition will further strengthen the company’s revenue generation in the quarters ahead.
Additionally, the company’s projected sales growth (F1/F0) of 2.5% ensures continuation of the upward revenue trend.
Earnings per Share Growth: State Street has witnessed earnings per share CAGR of 4.3% over the last five years (2011–2015). Further, this earnings momentum is likely to continue in the near term as reflected by the company’s projected EPS growth (F1/F0) of 2.7%.
Also, its long-term (3–5 years) estimated EPS growth rate of 7.3% promises rewards for investors in the long run.
Strong Leverage: State Street’s debt/equity ratio stands at 0.63 compared to the industry average of 0.93, indicating relatively lower debt burden. It indicates the financial stability of the company even in adverse economic conditions.
Superior Return on Equity (ROE): State Street’s ROE of 10.70%, as compared with the industry average of 8.65%, mirrors the company’s commendable position over its peers.
Favorable Zacks Rank: State Street currently sports a Zacks Rank #2 (Buy). This is driven by upward revisions in the Zacks Consensus Estimate over the last 60 days, which rose 5% for 2016 and 4.7% for 2017.
Rising Share Price: State Street’s share price has witnessed an uptrend, year to date, surging over 6%.
STATE ST CORP Price
STATE ST CORP Price | STATE ST CORP Quote
Other Stocks to Consider
Other stocks in the finance sector worth a look include Comerica Inc. CMA, Raymond James Financial, Inc. RJF and Federated Investors, Inc. FII. All three stocks hold the same Zacks Rank as State Street.
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COMERICA INC (CMA): Free Stock Analysis Report
STATE ST CORP (STT): Free Stock Analysis Report
RAYMOND JAS FIN (RJF): Free Stock Analysis Report
FEDERATED INVST (FII): Free Stock Analysis Report
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