SunTrust Offering A Strong Story Going Into 2019

Both SunTrust (STI) and BB&T Corp. (BBT) seem to have a lot working for them going into 2019, including improving cost leverage from digital investments, stronger-than-average loan growth in relatively attractive regional markets, and strong deposit franchises anchored by long-term leadership in those same markets. And probably not so surprisingly, they’re both priced for things going relatively well.

With what appears to be somewhat limited capacity to fund attractively priced loan growth and the likelihood of higher provisioning expense in the coming years, SunTrust’s earnings growth potential looks lackluster (in the low single digits), but the company pays a good dividend, could have some upside/outperformance potential in the numbers, and the shares are still undervalued, even if not so much so as other Southeast banks like Regions Financial Corp. (RF), First Horizon National Corp. (FHN), or Synovus Financial Corp. (SNV).

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SunTrust Offering A Strong Story Going Into 2019