For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Green Dot (GDOT) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.
Green Dot is a member of the Business Services sector. This group includes 247 individual stocks and currently holds a Zacks Sector Rank of #5. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Green Dot is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past three months, the Zacks Consensus Estimate for GDOT's full-year earnings has moved 21.6% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Based on the latest available data, GDOT has gained about 4.2% so far this year. In comparison, Business Services companies have returned an average of -6.9%. This shows that Green Dot is outperforming its peers so far this year.
One other Business Services stock that has outperformed the sector so far this year is Remitly Global, Inc. (RELY). The stock is up 72.1% year-to-date.
Over the past three months, Remitly Global, Inc.'s consensus EPS estimate for the current year has increased 21.6%. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Green Dot belongs to the Financial Transaction Services industry, a group that includes 37 individual companies and currently sits at #54 in the Zacks Industry Rank. This group has lost an average of 8.5% so far this year, so GDOT is performing better in this area. Remitly Global, Inc. is also part of the same industry.
Green Dot and Remitly Global, Inc. could continue their solid performance, so investors interested in Business Services stocks should continue to pay close attention to these stocks.
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This article originally published on Zacks Investment Research (zacks.com).