Over the last six months, Raymond James’s shares have sunk to $143.85, producing a disappointing 15.4% loss while the S&P 500 was flat. This may have investors wondering how to approach the situation.
Following the drawdown, is this a buying opportunity for RJF? Find out in our full research report, it’s free.
Why Do Investors Watch Raymond James?
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Three Positive Attributes:
1. Long-Term Revenue Growth Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Luckily, Raymond James’s revenue grew at a solid 11.7% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Raymond James’s EPS grew at 19.7% compounded annual growth rate over the last five years, higher than its 11.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.
Over the last five years, Raymond James has averaged an ROE of 17.9%, impressive for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Raymond James has a strong competitive moat.
Final Judgment
Raymond James possesses several positive attributes. After the recent drawdown, the stock trades at 11.7× forward P/E (or $143.85 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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