1st Source Corporation SRCE

Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns, and those that can do all three for years on end are almost always the legendary stocks that return 100 times your money.

1st Source has delivered a strong share price run in recent years, which naturally puts the focus on whether the current valuation lines up with the returns it earns on its capital. With the stock now around US$85.81, the key issue is whether that price fairly reflects the underlying profitability of the bank's lending and fee businesses. The share price has gained about 119.8% over the past 3 years, so the recent rally raises a clear question about how durable 1st Source's returns on...