This bank recently split its stock 2-fo-1, and is seeing its EPS forecasts on the rise.
First Financial Bankshares, Inc. (FFIN)
From 2 for 1 Stock Split Newsletter
There have been three 2 for 1 split announcements since the last issue of 2 for 1. Computer Services, Inc. (CSVI) failed our screening process right away because it is not traded on any of the major exchanges.
The other two, Fastenal Company (FAST) and First Financial Bankshares, Inc. (FFIN) provided a real choice. I was initially drawn to FAST because it is, literally, a nuts and bolts company, the kind I like, making and selling stuff that we actually need. It’s a well-run company with a lot going for it but, in my opinion, it’s in a business that will suffer if and when the economy goes into a tailspin. The recent upward momentum in its stock price will probably be hard to maintain.
First Financial Bankshares, Inc., therefore, is my choice for two reasons. 1) Its score in our ranking procedure was better than that of FAST, and 2) it compares very well when held up alongside Lakeland Financial (LKFN, a Wall Street’s Best Dividend Stocks pick), the successful stock we are selling this month.
First Financial is a bank holding company with 73 locations doing business all across Texas. With a strong balance sheet and a diversified loan portfolio, FFIN is well positioned to remain profitable no matter the ups and downs of the market. Like local and regional banks in days gone by, customer deposits remain its primary source of funding.
The comparison to Lakeland is interesting. As this is being written, valuation numbers, dividends, and measures of volatility are somewhat better for Lakeland. But the numbers that have to do with good governance and stability, such as debt and profitability, are stronger for First Financial. I would think this bodes well for the future and, of course the clincher—the two to three year “stock split advantage” has run out for LKFN but it’s just getting started for FFIN.
After the drought since before the beginning of the year, it was a relief to have several splits to choose from.
Neil Macneale, 2 for 1 Stock Split Newsletter, www.2-for-1.com, 408-210-6881, May 2019