Is Regions Financial Likely to Outperform?

January 22, 2013

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio is better than average for the industry. The balance sheet is in negative territory, but cash flow is strong. Operating cash flow is over $2 billion.

	Debt-To-Equity	Cash	Long-Term Debt
RF	0.55	$4.04 Billion	$6.22 Billion
IBKC	0.63	$623.07 Million	$429.30 Million
FNB	0.94	$367.59 Million	$294.51 Million

T = Technicals on the Stock Chart Are Strong

Regions Financial has outperformed smaller competitors IberiaBank Corp (NASDAQ:IBKC) and F.N.B. Corporation (NYSE:FNB) over the past year. However, Regions Financial only yields 0.50 percent whereas IberiaBank yields 2.60 percent, and F.N.B. Corporation yields 4.30 percent.

	1 Month	Year-To-Date	1 Year	3 Year
RF	3.48%	4.21%	52.26%	12.63%
IBKC	4.13%	5.31%	-3.83%	0.96%
FNB	2.00%	5.46%	-5.93%	77.71%

At $7.43, Regions Financial is currently trading above all its averages.

50-Day SMA	6.85
100-Day SMA	7.01
200-Day SMA	6.78

E = Earnings Have Been Weak

Earnings and revenue have been weak since 2008, but Regions Financial just reported much stronger results.

	2007	2008	2009	2010	2011
Revenue ($)in billions	10.93	9.64	8.04	7.13	6.40
Diluted EPS ($)	1.76	-8.09	-1.27	-0.62	-0.34

We already know what happened this quarter. Now let’s take a look at previous quarters.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	1.57	1.54	1.52	1.50	1.50
Diluted EPS ($)	0.08	-0.47	0.11	0.20	0.21

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