If EPS Growth Is Important To You, Fulton Financial (NASDAQ:FULT) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Fulton Financial (NASDAQ:FULT). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Fulton Financial with the means to add long-term value to shareholders.

View our latest analysis for Fulton Financial

How Fast Is Fulton Financial Growing?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. It certainly is nice to see that Fulton Financial has managed to grow EPS by 18% per year over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Our analysis has highlighted that Fulton Financial's revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. While we note Fulton Financial achieved similar EBIT margins to last year, revenue grew by a solid 9.7% to US$1.0b. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Fulton Financial's forecast profits?

Are Fulton Financial Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Despite US$20.3 worth of sales, Fulton Financial insiders have overwhelmingly been buying the stock, spending US$298k on purchases in the last twelve months. You could argue that level of buying implies genuine confidence in the business. It is also worth noting that it was President Curtis Myers who made the biggest single purchase, worth US$147k, paying US$9.81 per share.

Along with the insider buying, another encouraging sign for Fulton Financial is that insiders, as a group, have a considerable shareholding. As a matter of fact, their holding is valued at US$32m. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 1.2% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

While insiders are apparently happy to hold and accumulate shares, that is just part of the big picture. That's because on our analysis the CEO, Curt Myers, is paid less than the median for similar sized companies. Our analysis has discovered that the median total compensation for the CEOs of companies like Fulton Financial with market caps between US$2.0b and US$6.4b is about US$6.3m.

The CEO of Fulton Financial only received US$2.1m in total compensation for the year ending December 2022. That's clearly well below average, so at a glance that arrangement seems generous to shareholders and points to a modest remuneration culture. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Does Fulton Financial Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Fulton Financial's strong EPS growth. On top of that, insiders own a significant stake in the company and have been buying more shares. These things considered, this is one stock worth watching. You should always think about risks though. Case in point, we've spotted 1 warning sign for Fulton Financial you should be aware of.

Keen growth investors love to see insider buying. Thankfully, Fulton Financial isn't the only one. You can see a a curated list of companies which have exhibited consistent growth accompanied by recent insider buying.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.