East West Bancorp, Inc.’s (EWBC - Free Report) organic growth strategy remains impressive. The company’s capital deployment activities reflect a strong balance sheet and liquidity position. Through efficient capital deployments, EWBC is expected to keep enhancing shareholder value.
Moreover, analysts seem to be optimistic regarding the company’s earnings growth prospects. The Zacks Consensus Estimate for EWBC’s 2022 earnings has been revised 6.2% upward over the past 60 days. Thus, the company currently carries a Zacks Rank #2 (Buy).
Over the past year, shares of EWBC have lost 1% compared with the industry’s decline of 13.1%.
Looking at fundamentals, East West Bancorp’s net interest income (NII), which is the primary source of its revenues, witnessed a compound annual growth rate (CAGR) of 5.8% over the last five years (2017-2021). Over the same time frame, total loans witnessed a CAGR of 9.5% and deposits saw a CAGR of 14%.
The company’s NII, loans and deposits witnessed an uptrend in the first quarter of 2022. The continued rise in demand for loans and an improving economy are expected to keep supporting NII in the upcoming quarters.
East West Bancorp has a solid balance sheet. As of Mar 31, 2022, the company had total debt of $526.8 million, while cash and cash equivalents were $3.85 billion. Moreover, investment-grade credit ratings from Standard & Poor and Fitch Ratings render the company favorable access to the debt markets.
EWBC’s capital deployment activities seem impressive. In January 2022, the company hiked its quarterly dividend by 21%. This followed a 20% hike in January 2021 and April 2019, 15% in July 2018 and 11.1% in January 2015. The company also has a share repurchase plan in place, under which it authorized the repurchase of up to $500 million worth of shares. As of Mar 31, 2022, buyback authorization worth $354 million remained available.
However, despite the rate hikes in March and May, along with more rate hike expectations this year, margin pressure might continue for a while in the near term due to relatively lower rates.
Steadily increasing expenses (expenses witnessed a CAGR of 4.5% over the five-year period ended 2021) will likely hurt the company's bottom line to some extent. Moreover, deteriorating credit quality remains another concern.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the finance space are S&T Bancorp, Inc. (STBA - Free Report) and Arrow Financial Corporation (AROW - Free Report) . STBA currently sports a Zacks Rank #1 (Strong Buy), while AROW carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 12% upward over the past 60 days. Over the past year, STBA’s share price has declined 15.4%.
Arrow Financial’s current-year earnings estimates have been revised 3.2% upward over the past 60 days. AROW’s shares have lost 7.7% over the past year.
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With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
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East West Bancorp, Inc.’s (EWBC - Free Report) organic growth strategy remains impressive. The company’s capital deployment activities reflect a strong balance sheet and liquidity position. Through efficient capital deployments, EWBC is expected to keep enhancing shareholder value.
Moreover, analysts seem to be optimistic regarding the company’s earnings growth prospects. The Zacks Consensus Estimate for EWBC’s 2022 earnings has been revised 6.2% upward over the past 60 days. Thus, the company currently carries a Zacks Rank #2 (Buy).
Over the past year, shares of EWBC have lost 1% compared with the industry’s decline of 13.1%.
Looking at fundamentals, East West Bancorp’s net interest income (NII), which is the primary source of its revenues, witnessed a compound annual growth rate (CAGR) of 5.8% over the last five years (2017-2021). Over the same time frame, total loans witnessed a CAGR of 9.5% and deposits saw a CAGR of 14%.
The company’s NII, loans and deposits witnessed an uptrend in the first quarter of 2022. The continued rise in demand for loans and an improving economy are expected to keep supporting NII in the upcoming quarters.
East West Bancorp has a solid balance sheet. As of Mar 31, 2022, the company had total debt of $526.8 million, while cash and cash equivalents were $3.85 billion. Moreover, investment-grade credit ratings from Standard & Poor and Fitch Ratings render the company favorable access to the debt markets.
EWBC’s capital deployment activities seem impressive. In January 2022, the company hiked its quarterly dividend by 21%. This followed a 20% hike in January 2021 and April 2019, 15% in July 2018 and 11.1% in January 2015. The company also has a share repurchase plan in place, under which it authorized the repurchase of up to $500 million worth of shares. As of Mar 31, 2022, buyback authorization worth $354 million remained available.
However, despite the rate hikes in March and May, along with more rate hike expectations this year, margin pressure might continue for a while in the near term due to relatively lower rates.
Steadily increasing expenses (expenses witnessed a CAGR of 4.5% over the five-year period ended 2021) will likely hurt the company's bottom line to some extent. Moreover, deteriorating credit quality remains another concern.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the finance space are S&T Bancorp, Inc. (STBA - Free Report) and Arrow Financial Corporation (AROW - Free Report) . STBA currently sports a Zacks Rank #1 (Strong Buy), while AROW carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 12% upward over the past 60 days. Over the past year, STBA’s share price has declined 15.4%.
Arrow Financial’s current-year earnings estimates have been revised 3.2% upward over the past 60 days. AROW’s shares have lost 7.7% over the past year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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