New Zealand markets closed
  • NZX 50

    -26.06 (-0.23%)

    -0.0014 (-0.23%)

    -12.90 (-0.18%)
  • OIL

    +0.92 (+1.02%)
  • GOLD

    -3.40 (-0.18%)

4 Reasons Why Waterstone (WSBF) is an Attractive Pick Now

Waterstone Financial WSBF stock is a good investment option right now, supported by earnings and balance sheet growth. WSBF’s efficient capital deployment activities are likely to keep enhancing shareholders' value.

The Zacks Consensus Estimate for Waterstone's 2023 earnings has been revised 11% upward over the past 60 days. This shows that analysts are optimistic regarding the company’s earnings growth prospects. Thus, WSBF currently carries a Zacks Rank #2 (Buy).

Over the past three months, shares of the company have declined 16.2% compared with the industry's fall of 28.2%.


Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research


Mentioned below are a few factors that make WSBF stock an attractive pick now:

Balance Sheet Growth: The company has displayed balance sheet growth over the last three years. Total loans witnessed a compound annual growth rate (CAGR) of 65.3% over the last three years (2020-2022), which was primarily led by a rise in one-to-four-family loans. Total deposits witnessed a CAGR of 2.7% over the last three years (2020-2022).

Earnings Growth: In the last three to five years, the company witnessed earnings per share (EPS) growth of 9.4% compared with the industry’s rise of 10.8%. Its earnings are projected to increase 3.4% in 2023 and 29.3% in 2024.

Revenue Growth: Waterstone's net interest income, which is a key component of revenues, witnessed a CAGR of 3.2% over the last three years (2020-2022). The trend is likely to continue in the near term, given the high interest rate environment. This is likely to support the top line. Revenues are expected to decline in 2023 but rebound and grow 11% in 2024.

Encouraging Capital Deployment Activities: Waterstone pays quarterly dividends on a regular basis. On Mar 22, WSBF announced its quarterly dividend of 20 cents per share. It increased dividends five times in the last five years. This resulted in an annualized dividend yield of 5.8%, considering the last day’s closing price of $13.52. Apart from being attractive to investors, the yield also represented a steady income stream.

WSBF announced a new stock repurchase program in the fourth quarter of 2021, authorizing it to repurchase up to 3,500,000 shares. As of Mar 31, 2023, the company had 393,000 shares left under the authorization. Such strategic moves enhance shareholders’ value and boost investors’ confidence in the stock.

Other Bank Stocks Worth a Look

A couple of other top-ranked stocks from the banking space are BNP Paribas BNPQY and First Citizens BancShares FCNCA.

The Zacks Consensus Estimate for BNP Paribas’ current-year earnings has been revised 15.2% upward over the past 30 days. Its shares have gained 4.4% in the past six months. Currently, BNPQY sports a Zacks Rank #1 (Strong Buy).

First Citizens BancShares also sports a Zacks Rank #1 at present. Its earnings estimates for 2023 have been revised 67.2% upward over the past 30 days. In the past six months, FCNCA’s shares have rallied 53.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

First Citizens BancShares, Inc. (FCNCA) : Free Stock Analysis Report

BNP Paribas SA (BNPQY) : Free Stock Analysis Report

Waterstone Financial, Inc. (WSBF) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research