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5 Reasons to Buy Western Alliance (WAL) Stock Right Now
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Amid global headwinds, investors have been shying away from investing in the banking sector. However, there are many banks with a decent performance history and strong fundamentals, signaling a profitable investment opportunity. Hence, it is not advisable to ignore the sector totally.
Western Alliance Bancorporation (WAL - Free Report) is one such bank that continues to reflect strength in several areas. Thus, adding the stock to your investment portfolio should not be disappointing. With a market capitalization of over $3.9 billion, the company provides several banking products and related services primarily in Arizona, California, and Nevada.
Notably, the stock of this Phoenix, AZ -based company has gained more than 18% over the last one year.
Earnings Strength: Western Alliance has recorded earnings growth rate of 29.3% over a period of three to five years, compared with the industry average of 6.9%. Continuing with the earnings momentum, the earnings growth rate for the current year is expected to be 24.7%.
Further, the company’s long-term (3–5 years) estimated earnings growth rate of 11.3% promises rewards for investors in the long run.
Revenue Growth: Organic growth remains strong at Western Alliance. Revenues grew at a CAGR of 10.1% over the last three years (2013–2015). Further, the top line is expected to surge 37.4% in 2016.
Superior Return on Equity: Western Alliance has a return on equity of 13.15% compared with the industry average of 9.21%. This indicates that the company reinvests more efficiently compared with its peers.
Stock Looks Undervalued: Western Alliance stock looks undervalued with respect to its Price-to-Earnings (P/E) and PEG ratios. It has a P/E ratio of 14.76, compared with the industry average of 16.11. Also, the company’s PEG ratio of 1.30 is below the industry average of 1.60.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate has inched up by a penny to $2.53, for 2016. Backed by these upward estimate revisions, the company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
If you are interested in other West banks, you may consider BofI Holding, Inc. , Bank of Hawaii Corporation (BOH - Free Report) and Central Pacific Financial Corp. (CPF - Free Report) as well.
Currently holding a Zacks Rank #2, BofI Holding’s earnings for the current year are expected to grow at an impressive 16.4% rate. Also, the stock has gained more than 6% so far this year.
The Zacks Rank #2 stock, Bank of Hawaii’s earnings for 2016 are expected to grow at the rate of 11.4%. Further, year to date, shares of the company have gained nearly 16%.
Central Pacific Financial’s shares have gained 14.9% so far this year. In addition, earnings for this Zacks Rank #2 stock are expected to grow at a rate of 6.8% in 2016.
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5 Reasons to Buy Western Alliance (WAL) Stock Right Now
Amid global headwinds, investors have been shying away from investing in the banking sector. However, there are many banks with a decent performance history and strong fundamentals, signaling a profitable investment opportunity. Hence, it is not advisable to ignore the sector totally.
Western Alliance Bancorporation (WAL - Free Report) is one such bank that continues to reflect strength in several areas. Thus, adding the stock to your investment portfolio should not be disappointing. With a market capitalization of over $3.9 billion, the company provides several banking products and related services primarily in Arizona, California, and Nevada.
Notably, the stock of this Phoenix, AZ -based company has gained more than 18% over the last one year.
WESTERN ALLIANC Price
WESTERN ALLIANC Price | WESTERN ALLIANC Quote
Why is Western Alliance a Solid Pick?
Earnings Strength: Western Alliance has recorded earnings growth rate of 29.3% over a period of three to five years, compared with the industry average of 6.9%. Continuing with the earnings momentum, the earnings growth rate for the current year is expected to be 24.7%.
Further, the company’s long-term (3–5 years) estimated earnings growth rate of 11.3% promises rewards for investors in the long run.
Revenue Growth: Organic growth remains strong at Western Alliance. Revenues grew at a CAGR of 10.1% over the last three years (2013–2015). Further, the top line is expected to surge 37.4% in 2016.
Superior Return on Equity: Western Alliance has a return on equity of 13.15% compared with the industry average of 9.21%. This indicates that the company reinvests more efficiently compared with its peers.
Stock Looks Undervalued: Western Alliance stock looks undervalued with respect to its Price-to-Earnings (P/E) and PEG ratios. It has a P/E ratio of 14.76, compared with the industry average of 16.11. Also, the company’s PEG ratio of 1.30 is below the industry average of 1.60.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate has inched up by a penny to $2.53, for 2016. Backed by these upward estimate revisions, the company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
If you are interested in other West banks, you may consider BofI Holding, Inc. , Bank of Hawaii Corporation (BOH - Free Report) and Central Pacific Financial Corp. (CPF - Free Report) as well.
Currently holding a Zacks Rank #2, BofI Holding’s earnings for the current year are expected to grow at an impressive 16.4% rate. Also, the stock has gained more than 6% so far this year.
The Zacks Rank #2 stock, Bank of Hawaii’s earnings for 2016 are expected to grow at the rate of 11.4%. Further, year to date, shares of the company have gained nearly 16%.
Central Pacific Financial’s shares have gained 14.9% so far this year. In addition, earnings for this Zacks Rank #2 stock are expected to grow at a rate of 6.8% in 2016.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>