Forget TD Bank (TD), Buy These 3 Financial Stocks Instead

TD Bank (TD - Snapshot Report) shares haven’t been hot.  As a matter of fact, TD’s stock price is 23% lower than it was at this time last year.  Investors in the stock may not want to hold onto their TD shares much longer, as the bank has received multiple price target downgrades from brokerage firms in the last month.  We’ve echoed their sentiment, and have recently downgraded the stock to a Zacks Rank #4 (Sell).

One particularly disappointing stat to point out about TD Bank is the fact that sales are projected to decrease by -27.76% this year.  Let’s forget about TD and find some better financial stocks.  Below, we evaluate three companies, all of which have positive projected sales and EPS growth for this year.  Each of them also has a nice track record for beating our earnings consensus estimate when they report their quarterly earnings.  Some of the valuations on these stocks are worth taking note of as well. 
 
SLM Corporation-(SLM - Analyst Report)
 
SLM Corporation is one of the largest private sources of funding for students and parents seeking loans for higher education.  It holds a Zacks Rank #2 (Buy).  The company is projected to see its EPS grow by 38.1% this year.  It also has a nice net margin of about 25%.  SLM seems to be handling its debt well, as it has debt/capital and debt to equity of 0%.  Investors are getting a nice return on equity of 18.21%.
 
Some of the valuations on this company are worth taking note of.  For instance, SLM has a PEG of just 0.57.  It trades at a relatively low forward PE of 14.1.  SLM has beaten our EPS consensus in three of the last four quarters.  The corporation reports its earnings on 10/28/15.
 
Cigna Corporation-(CI - Analyst Report)
 
Cigna is one of the largest providers of health insurance to employers and their employees in the nation.  It helps to provide lower healthcare costs for companies and their employees.  The healthcare insurance company is a Zacks Rank #2 (Buy).  Shares of this company may help you lower your exposure to market risk, as it has a beta of 0.65.  Cigna’s EPS is projected to grow by 16.79% this year.  Its sales are also expected to grow by 13.52%.
 
CI stock trades at a price to sales of 0.99.  A price to sales under one may suggest that there is value present.  Cigna has a PEG of 1.34.  It also has a nice trailing twelve month ROE of 19.37%.  CI has a reasonable debt to capital of 31.18%. 
 
The company has beaten our EPS consensus estimate in each of the last four quarters.  Across the span of those four quarters, Cigna has beaten our consensus by an average of 5.81% per quarter.  The insurance provider reports its earnings on 10/29/15.
 
Aercap Holdings-(AER - Snapshot Report)   
 
Aercap Holdings specializes in leasing out aircraft, engines, and other aircraft parts to airliners around the world.  Its stock is a Zacks Rank #1 (Strong Buy).  It is an especially strong candidate with regards to growth and value. 
 
Aercap’s net margin stands pretty tall at 24.15%.  It also provides an ROE of 15.86% to investors, which is significant because the industry’s ROE is only about 8.44%.  AER’s EPS is projected to grow by 24.43% this year.  Its current cash flow growth is a massive 239.57%.  Sales are also expected to increase by 41.3% this year.
 
The aircraft leaser is trading at a price to book of just 1.07.  Its forward PE is just as impressive at 7.14.  Aercap also has an impressive price to sales of 1.61.  Our EPS consensus for this quarter has been trending upwards over the last 90 days.  About 3 months ago, our EPS consensus estimated earnings of $1.34 per share for this quarter.  Now, the consensus estimates EPS of $1.45.  The company reports its earnings on 11/3/15.    
 
Bottom Line
 
It’s a bummer that TD stock hasn’t been fairing too well, but I am honestly not surprised.  I’m not about to place my bets on this faltering bank.  I would rather put faith in the three stocks above because of their continued growth and earnings appreciation. 

Disclosure: Zacks.com contains statements and statistics that have ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.