Over the past six months, Stifel’s shares (currently trading at $75.21) have posted a disappointing 12.7% loss, well below the S&P 500’s 8.4% gain. This might have investors contemplating their next move.
Following the drawdown, is now an opportune time to buy SF? Find out in our full research report, it’s free.
Why Do Investors Watch SF Stock?
Tracing its roots back to 1890 when the firm was established in St. Louis, Stifel Financial (NYSE: SF) is a financial services firm that provides wealth management, investment banking, and institutional brokerage services to individuals, corporations, and institutions.
Three Things to Like:
1. Long-Term Revenue Growth Shows Momentum
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Luckily, Stifel’s revenue grew at a decent 7.5% compounded annual growth rate over the last five years. Its growth was slightly above the average financials company and shows its offerings resonate with customers.
2. EPS Surges Higher Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Stifel’s EPS grew at an astounding 32.9% compounded annual growth rate over the last two years, higher than its 13.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Market-Beating ROE Showcases Attractive Growth Opportunities
Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of financial firm funding. Financial firms maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.
Over the last five years, Stifel has averaged an ROE of 13.2%, healthy for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Stifel has a decent competitive moat.
Final Judgment
There are definitely things to like about Stifel. With the recent decline, the stock trades at 11.7× forward P/E (or $75.21 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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