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Western Alliance (WAL) to Initiate Dividend: Should You Buy?
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Bringing in good news for shareholders, Western Alliance Bancorporation (WAL - Free Report) has come up with the first quarterly dividend announcement of 25 cent per share, beginning third-quarter 2019. Based on last day’s closing price of $44.40 per share, the dividend yield is 2.25%.
The board of directors has approved of the dividend, and the record and payment dates, expected to occur in August, will be declared at the company’s meeting to be held on Jul 30.
Alongside, the company has an impressive share repurchase plan. As of Jun 4, Western Alliance had $142.5 million remaining of its original $250 million buyback authorization.
Also, over the past six months, the company’s shares have rallied 7.5% compared with slight growth registered by the industry.
So, is this Zacks Rank #2 (Buy) stock worth adding to the portfolio based on the dividend initiation announcement? Let’s dig deeper into its fundamentals and financial strengths to understand better.
Earnings Strength: Western Alliance has recorded an earnings growth rate of 25.2% over the last three to five years compared with the industry average of 14.7%. Continuing with the earnings momentum, the earnings growth rate for the current year is expected to be 14.5%.
Further, the company’s long-term (three to five years) estimated earnings growth rate of 11.3% promises rewards for investors in the long run.
Revenue Growth: The company continues to make steady progress toward improving its top line. Its revenues recorded a five-year (ended 2018) CAGR of around 25%. Further, its projected revenue growth (F1/F0) of 14.9% (against the industry average of about nearly 2%) indicates consistent upward momentum in revenues.
Superior Return on Equity: Western Alliance has a return on equity of 17.84% compared with the industry average of 11.8%. This indicates that the company reinvests more efficiently compared with its peers.
Strong Leverage: The company’s debt/equity ratio is valued at 0.14 compared with the industry’s average of 0.18. The relatively strong financial health of the company will help it perform better in an unstable economic environment compared with its peers.
Favorable VGM Score: Western Alliance has a VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Our research shows stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Our Take
Investing in Western Alliance at present seems to be a wise decision, given the solid revenue and earnings growth prospects, strong liquidity position and improved capital-deployment activities.
Other Key Picks
TriCo Bancshares’ (TCBK - Free Report) shares have yielded 4.2% over the past six months. Also, the company’s earnings estimates for the current year have been revised 1% upward over the past 60 days. The stock has a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Mackinac Financial Corporation’s shares have rallied 13.4% in six months’ time. Further, the company’s earnings estimates for the ongoing year have moved 2.3% north in the past 60 days. The stock carries a Zacks Rank of 2, currently.
Farmers National Banc Corp. (FMNB - Free Report) shares have gained 8.8%, in the past six months. In addition, this Zacks #2 Ranked company’s earnings estimates for 2019 have moved up slightly, in 60 days’ time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Western Alliance (WAL) to Initiate Dividend: Should You Buy?
Bringing in good news for shareholders, Western Alliance Bancorporation (WAL - Free Report) has come up with the first quarterly dividend announcement of 25 cent per share, beginning third-quarter 2019. Based on last day’s closing price of $44.40 per share, the dividend yield is 2.25%.
The board of directors has approved of the dividend, and the record and payment dates, expected to occur in August, will be declared at the company’s meeting to be held on Jul 30.
Alongside, the company has an impressive share repurchase plan. As of Jun 4, Western Alliance had $142.5 million remaining of its original $250 million buyback authorization.
Also, over the past six months, the company’s shares have rallied 7.5% compared with slight growth registered by the industry.
So, is this Zacks Rank #2 (Buy) stock worth adding to the portfolio based on the dividend initiation announcement? Let’s dig deeper into its fundamentals and financial strengths to understand better.
Earnings Strength: Western Alliance has recorded an earnings growth rate of 25.2% over the last three to five years compared with the industry average of 14.7%. Continuing with the earnings momentum, the earnings growth rate for the current year is expected to be 14.5%.
Further, the company’s long-term (three to five years) estimated earnings growth rate of 11.3% promises rewards for investors in the long run.
Revenue Growth: The company continues to make steady progress toward improving its top line. Its revenues recorded a five-year (ended 2018) CAGR of around 25%. Further, its projected revenue growth (F1/F0) of 14.9% (against the industry average of about nearly 2%) indicates consistent upward momentum in revenues.
Superior Return on Equity: Western Alliance has a return on equity of 17.84% compared with the industry average of 11.8%. This indicates that the company reinvests more efficiently compared with its peers.
Strong Leverage: The company’s debt/equity ratio is valued at 0.14 compared with the industry’s average of 0.18. The relatively strong financial health of the company will help it perform better in an unstable economic environment compared with its peers.
Favorable VGM Score: Western Alliance has a VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Our research shows stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Our Take
Investing in Western Alliance at present seems to be a wise decision, given the solid revenue and earnings growth prospects, strong liquidity position and improved capital-deployment activities.
Other Key Picks
TriCo Bancshares’ (TCBK - Free Report) shares have yielded 4.2% over the past six months. Also, the company’s earnings estimates for the current year have been revised 1% upward over the past 60 days. The stock has a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Mackinac Financial Corporation’s shares have rallied 13.4% in six months’ time. Further, the company’s earnings estimates for the ongoing year have moved 2.3% north in the past 60 days. The stock carries a Zacks Rank of 2, currently.
Farmers National Banc Corp. (FMNB - Free Report) shares have gained 8.8%, in the past six months. In addition, this Zacks #2 Ranked company’s earnings estimates for 2019 have moved up slightly, in 60 days’ time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>