How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Regions Financial (RF) ten years ago? It may not have been easy to hold on to RF for all that time, but if you did, how much would your investment be worth today?
Regions Financial's Business In-Depth
With that in mind, let's take a look at Regions Financial's main business drivers.
Regions Financial Corporation is a Birmingham, AL-based financial holding company, providing retail and commercial banking, trust, securities brokerage, insurance brokerage, mortgage and insurance products and services. As of Mar 31, 2021, Regions Financial operated 1,300 banking offices and 2,000 ATMs across a 16-state network over the South, Midwest and Texas.
The company has five business segments.
The Corporate Bank (44% of total average assets as of Dec 31, 2020) segment includes the company’s commercial banking functions including commercial and industrial, commercial real estate, investor real estate lending and equipment lease financing.
The Consumer Bank (25%) segment comprises the company’s branch network, including consumer banking products and services as well as the corresponding deposit relationships.
The Wealth Management (2%) segment consists of wealth management products and services. This segment provides services such as investment advice, assistance in managing assets and estate planning to individuals and institutional clients.
Other (29%) includes the company’s treasury function, the securities portfolio, wholesale funding activities, interest rate risk management activities and other corporate functions that are not related to a strategic business unit.
Notably, another segment – Discontinued Operations constitutes all brokerage and investment activities associated with Morgan Keegan, which was sold in April 2012 and the sale of Regions Insurance Group, Inc. and related affiliates, which closed on Jul 2, 2018.
In April 2020, the company acquired equipment finance lender, Ascentium Capital LLC, from Warburg Pincus. Also, in August 2019, Regions Financial closed acquisition of Highland Associates — a leading institutional investment firm. In July 2018, it completed the divesture of Regions Insurance Group to BB&T Insurance Holdings — a wholly owned subsidiary of BB&T Corporation.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Regions Financial, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in May 2011 would be worth $3,147.27, or a 214.73% gain, as of May 12, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 209.38% and the price of gold increased 17.43% over the same time frame in comparison.
Analysts are forecasting more upside for RF too.
Shares of Regions Financial have underperformed the industry over the past three months. Yet, the company's earnings surprise history is impressive as it surpassed the Zacks Consensus Estimate in three of the trailing four quarters. First-quarter results reflect revenue growth and lower credit provisions. Favorable funding mix and attractive core business are likely to aid profitability in the quarters ahead. Simplify and Grow initiatives to streamline structure and branches act as a tailwind. Decent loan growth is likely to support interest income in the quarters ahead. Further, it is less exposed to credit risk in case of any economic downturn. However, pressure on margin due to low rates is likely to hamper topline growth. Also, significant exposure to commercial loans and unsustainable capital deployment activities keep us apprehensive.
Shares have gained 7.68% over the past four weeks and there have been 12 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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Regions Financial Corporation (RF) : Free Stock Analysis Report
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