Popular Stock Touches 52-Week High: Should You Consider Investing?

Core Insights - Popular, Inc. (BPOP) shares reached a 52-week high of $128.89, closing at $126.98, with a 36.8% increase over the past six months, outperforming the industry growth of 11.2% [1][8] - The stock's recent performance is driven by optimism regarding the Federal Reserve's interest rate cuts, which are expected to boost loan demand and reduce funding costs for banks like BPOP [3][8] Financial Performance - Over the past four years, BPOP's net interest income (NII) grew at a compound annual growth rate (CAGR) of 5.3%, with net interest margin (NIM) improving from 2.88% in 2021 to 3.24% in 2024 [4] - The company anticipates further growth in NII and NIM, supported by the repricing of its investment portfolio and expected continued rate cuts by the Federal Reserve [4] Growth Strategies - BPOP has focused on organic growth, achieving a revenue CAGR of 5.6% over the past four years, with net loans expanding at a CAGR of 6.8% and deposits at 3.4% [5] - The company launched a multi-year digital transformation initiative in 2022 to enhance customer experience and operational efficiency [6][9] Liquidity and Shareholder Returns - As of June 30, 2025, BPOP's liquidity stood at $6.8 billion, with total debt at $1.4 billion, indicating a strong liquidity profile [11] - The company raised its quarterly dividend by 7.1% to 75 cents per share, resulting in a dividend yield of 2.36%, which is competitive compared to peers [12][15] Valuation - BPOP is currently trading at a 12-month trailing price-to-earnings (P/E) ratio of 10.27X, lower than the industry average of 10.86X, making it an attractive investment option [17][20] - Compared to peers, Pinnacle Financial has a P/E ratio of 11.21X, while Synovus Financial's P/E ratio is 9.02X, further highlighting BPOP's favorable valuation [20]