Popular Inc
NASDAQ:BPOP
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Intrinsic Value
The intrinsic value of one BPOP stock under the Base Case scenario is 131.2 USD. Compared to the current market price of 98.96 USD, Popular Inc is Undervalued by 25%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Popular Inc
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Fundamental Analysis
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Popular Inc
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Popular Inc., a prominent financial services company based in Puerto Rico, operates as the parent of Banco Popular, one of the largest banks in the Caribbean. Established in 1893, the company has built a strong reputation by providing a diverse range of banking services, including retail banking, commercial lending, and investment management. Over the years, Popular Inc. has strategically expanded its reach beyond Puerto Rico to the U.S. mainland, particularly targeting Hispanic communities. This diversification strategy has bolstered its financial position, enabling it to provide tailored solutions while tapping into growing demographic trends in the U.S. market. With a keen eye on fiscal p...
Popular Inc., a prominent financial services company based in Puerto Rico, operates as the parent of Banco Popular, one of the largest banks in the Caribbean. Established in 1893, the company has built a strong reputation by providing a diverse range of banking services, including retail banking, commercial lending, and investment management. Over the years, Popular Inc. has strategically expanded its reach beyond Puerto Rico to the U.S. mainland, particularly targeting Hispanic communities. This diversification strategy has bolstered its financial position, enabling it to provide tailored solutions while tapping into growing demographic trends in the U.S. market. With a keen eye on fiscal prudence and community investment, Popular Inc. not only prioritizes profitability but also seeks to enhance financial literacy and growth in the communities it serves.
In recent years, Popular Inc. has demonstrated resilience through economic challenges, driven by a robust balance sheet and effective risk management practices. The company's commitment to technological advancement has also positioned it favorably in an increasingly digital banking landscape. Investors have responded positively to its steady growth trajectory, reflected in its consistent dividend payouts and strong return on equity. As the financial sector evolves, Popular Inc. is poised to capitalize on emerging opportunities within fintech and customer-centric banking innovations, making it a compelling consideration for investors seeking exposure to both U.S. and Caribbean markets. With a clear vision and a rich heritage, Popular Inc. stands at the intersection of tradition and modern finance, showcasing its potential for future growth.
Popular Inc. is a financial services holding company, primarily operating within the banking sector. Its core business segments include:
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Commercial Banking: This segment includes a variety of services for businesses, such as lending, cash management, and deposit services. It caters to small, medium, and large enterprises and focuses on providing tailored financial solutions.
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Retail Banking: Popular Inc. offers a range of personal banking services, including savings and checking accounts, personal loans, mortgages, and credit cards. This segment targets individual customers, aiming to meet their personal finance needs.
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Mortgage Banking: This segment deals with the origination, servicing, and securitization of mortgage loans. It plays a significant role in providing housing financing solutions to customers, both in Puerto Rico and the mainland United States.
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Wealth Management and Investment Services: Popular Inc. offers wealth management solutions, asset management, investment advisory services, and brokerage services. This segment caters to high-net-worth individuals and institutional clients, helping them manage and grow their assets.
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Insurance Services: Although not the primary focus, Popular Inc. also offers insurance products, which may include life, health, property, and casualty insurance, often bundled with their banking products.
These core segments help Popular Inc. diversify its revenue streams and serve a wide range of customers from individuals to businesses, leveraging their extensive network and regional presence, primarily in Puerto Rico and the U.S. mainland.
Popular Inc., a financial services institution primarily based in Puerto Rico and the mainland U.S., holds several unique competitive advantages over its rivals. Here are a few key points:
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Strong Brand Recognition in Puerto Rico: As one of the largest banks in Puerto Rico, Popular Inc. has a long-standing reputation and established trust with local consumers. This brand loyalty can be a significant advantage in retaining customers and attracting new ones.
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Diversified Revenue Streams: Popular Inc. operates in multiple segments including banking, auto loans, mortgages, and investment services. This diversification allows it to mitigate risks associated with downturns in specific sectors and creates a more stable earnings base.
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Comprehensive Knowledge of Local Markets: The bank has deep insights into the Puerto Rican market, which enables it to tailor products and services that meet the specific needs of its customers. This local expertise can be difficult for mainland banks to replicate.
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Focus on Community Banking: By emphasizing community engagement and local decision-making, Popular Inc. can foster stronger relationships with its customers, enhancing customer loyalty and satisfaction compared to other banks that may take a more transactional approach.
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Strong Capital Position: Popular Inc. maintains a robust capital structure, which provides it with the flexibility to invest in growth opportunities, navigate economic downturns, and absorb potential losses better than less-capitalized competitors.
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Technological Innovations: Popular Inc. has made significant investments in technology and digital banking platforms. This focus on innovation allows it to compete effectively with both traditional banks and fintech companies, enhancing customer experience and operational efficiency.
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Regulatory Advantage: Given its history and established operations, Popular Inc. may have a better understanding of the regulatory landscape in Puerto Rico, allowing it to navigate compliance more efficiently than newer entrants or smaller competitors.
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Established Relationships: Long-standing relationships with local businesses and governments provide Popular Inc. with a competitive edge in securing business opportunities and attracting commercial clients.
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Cultural Alignment: As a bank rooted in Puerto Rican culture, Popular Inc. may be better positioned to understand and meet the unique financial needs of its clientele compared to mainland banks that may not have the same cultural context.
These advantages, when strategically leveraged, help Popular Inc. maintain a competitive edge in both Puerto Rico and mainland markets.
As a business analyst, I can identify several risks and challenges that Popular Inc. may face in the near future. These can be categorized into various domains:
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Economic Environment:
- Interest Rate Fluctuations: Changes in interest rates can impact the company's loan portfolio, affecting margins and profitability.
- Inflation: Rising inflation may lead to increased operational costs and reduced consumer purchasing power, impacting loan demand.
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Regulatory Challenges:
- Compliance Costs: Stricter regulations in the financial sector can lead to higher compliance costs and potential penalties if regulations are not met.
- Changes in Tax Legislation: Shifts in tax policies may affect overall profitability and decision-making concerning investments and operations.
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Technological Disruption:
- Fintech Competition: Increased competition from fintech companies can threaten traditional banking services, requiring Popular Inc. to innovate rapidly.
- Cybersecurity Threats: As reliance on technology increases, the threat of cyberattacks poses a significant risk to customer data and trust.
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Market Competition:
- Consolidation in the Banking Industry: Mergers and acquisitions among competitors could lead to increased competition, impacting market share and pricing strategies.
- Customer Retention: Attracting and retaining customers can be challenging amid competitive pricing and enhanced customer service offerings from rivals.
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Operational Risks:
- Geographic Concentration: Depending heavily on specific markets (like Puerto Rico) can expose the company to regional economic downturns and natural disasters.
- Credit Risk: Economic volatility could lead to higher default rates among borrowers, impacting loan portfolios.
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Reputation Risks:
- Ethical Concerns: Any negative publicity or issues related to lending practices or customer service can damage the brand’s reputation and customer loyalty.
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Human Capital Challenges:
- Talent Acquisition and Retention: Competing for skilled talent in the financial sector can be difficult, particularly in specialized areas like data analytics and cybersecurity.
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Global Events:
- Pandemic Aftereffects: Ongoing impacts from global events such as pandemics can disrupt economic stability and consumer behavior.
By addressing these risks with strategies such as diversification, technological investment, and robust compliance programs, Popular Inc. can better position itself to navigate these challenges in the near future.
Balance Sheet Decomposition
Popular Inc
Net Loans | 35.4B |
Investments | 31.9B |
PP&E | 624.4m |
Intangibles | 920.8m |
Other Assets | 2.4B |
Total Deposits | 63.7B |
Short Term Debt | 55.4m |
Long Term Debt | 918.4m |
Other Liabilities | 890.3m |
In Q3, Popular, Inc. reported net income of $155 million, down $23 million from the previous quarter, primarily due to increased credit loss provisions. Loan growth was robust, increasing by $603 million, with strong performances in commercial lending and mortgages. However, deposits fell by approximately $1 billion, affecting net interest income, which slightly rose by $4 million. The net interest margin expanded to 3.24%, with expectations for further growth in Q4. The company anticipates a year-over-year NII increase of 6-7% for 2024, while targeting a 12% return on tangible common equity by Q4 2025.
What is Earnings Call?
Wall St
Price Targets
BPOP Price Targets Summary
Popular Inc
According to Wall Street analysts, the average 1-year price target for BPOP is 105.51 USD with a low forecast of 96.96 USD and a high forecast of 117.6 USD.
Dividends
Current shareholder yield for BPOP is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Ownership
BPOP Insider Trading
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Profile
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Description
Popular, Inc. operates as a holding company. The firm operates in two segments: Banco Popular de Puerto Rico (BPPR), which includes its Puerto Rico business, and Banco Popular North America (BPNA), which includes its the United States mainland business. The firm has operations in Puerto Rico, the United States and the Caribbean. The firm's BPPR segment provides retail, mortgage and commercial banking services through its banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. The firm's BPNA segment consists of Popular North America, Inc. (PNA) functioning as the holding company for its operations in the United States. The company also operates PNA's subsidiary, E-LOAN, Inc. The banking operations of BPNA in the United States mainland are based in New York, Florida and New Jersey, conducted under the name of Popular Community Bank.
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The intrinsic value of one BPOP stock under the Base Case scenario is 131.2 USD.
Compared to the current market price of 98.96 USD, Popular Inc is Undervalued by 25%.