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Robust Loan Growth to Aid Washington Federal's (WAFD) Top Line
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Washington Federal, Inc.’s (WAFD - Free Report) efforts to diversify revenues and consistent growth in loan balances are expected to keep supporting financials in the near term. Supported by a solid liquidity position, the company is expected to continue with efficient capital deployment activities, thus enhancing shareholder value.
Analysts are also optimistic regarding WAFD’s earnings growth prospects. The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved 3.2% upward over the past 60 days. Thus, WAFD currently carries a Zacks Rank #2 (Buy).
Over the past year, shares of the company have rallied 5.3% against the industry’s decline of 1.5%.
Image Source: Zacks Investment Research
Looking at fundamentals, WAFD’s revenues witnessed a compound annual growth rate (CAGR) of 3.5% over the last six fiscal years (2016-2021). The upswing was largely driven by improving net loan balances, which saw a CAGR of 6.9% over the same period. Supported by the constant rise in loan demand, the company’s top line is expected to continue to improve in the quarters ahead.
Moreover, Washington Federal has a robust balance sheet. As of Dec 31, 2021, WAFD had total debt worth $1.72 billion, and cash and cash equivalents worth $1.88 billion. Given the decent earnings strength, the company is expected to continue meeting debt obligations in the near term, even if the economic situation worsens.
Since fiscal 2011, WAFD has been increasing its quarterly dividend on a regular basis, with the latest hike announced in January 2022. The bank also has a share repurchase plan in place. As of Dec 31, 2021, it had 3.7 million shares remaining under the buyback authorization. Given its earnings strength, it is expected to sustain efficient capital deployments.
However, persistently increasing operating expenses mainly due to higher compensation and information technology costs are expected to hurt the bottom line to some extent. Also, despite the expected interest rate hikes in 2022, the relatively low interest-rate environment might continue to put pressure on margins for some time in the near term, thereby impacting top-line growth.
Over the past six months, shares of East West Bancorp have gained 5.9%, while that of Zions have rallied 14.4%.
Over the past 60 days, the Zacks Consensus Estimate for East West Bancorp’s current-year earnings has been revised 6.6% upward, while the same for Zions has moved 6.9% north.
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Robust Loan Growth to Aid Washington Federal's (WAFD) Top Line
Washington Federal, Inc.’s (WAFD - Free Report) efforts to diversify revenues and consistent growth in loan balances are expected to keep supporting financials in the near term. Supported by a solid liquidity position, the company is expected to continue with efficient capital deployment activities, thus enhancing shareholder value.
Analysts are also optimistic regarding WAFD’s earnings growth prospects. The Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved 3.2% upward over the past 60 days. Thus, WAFD currently carries a Zacks Rank #2 (Buy).
Over the past year, shares of the company have rallied 5.3% against the industry’s decline of 1.5%.
Image Source: Zacks Investment Research
Looking at fundamentals, WAFD’s revenues witnessed a compound annual growth rate (CAGR) of 3.5% over the last six fiscal years (2016-2021). The upswing was largely driven by improving net loan balances, which saw a CAGR of 6.9% over the same period. Supported by the constant rise in loan demand, the company’s top line is expected to continue to improve in the quarters ahead.
Moreover, Washington Federal has a robust balance sheet. As of Dec 31, 2021, WAFD had total debt worth $1.72 billion, and cash and cash equivalents worth $1.88 billion. Given the decent earnings strength, the company is expected to continue meeting debt obligations in the near term, even if the economic situation worsens.
Since fiscal 2011, WAFD has been increasing its quarterly dividend on a regular basis, with the latest hike announced in January 2022. The bank also has a share repurchase plan in place. As of Dec 31, 2021, it had 3.7 million shares remaining under the buyback authorization. Given its earnings strength, it is expected to sustain efficient capital deployments.
However, persistently increasing operating expenses mainly due to higher compensation and information technology costs are expected to hurt the bottom line to some extent. Also, despite the expected interest rate hikes in 2022, the relatively low interest-rate environment might continue to put pressure on margins for some time in the near term, thereby impacting top-line growth.
Other Stocks to Consider
A couple of other top-ranked stocks from the same space are East West Bancorp (EWBC - Free Report) and Zions Bancorporation (ZION - Free Report) . At present, EWBC and ZION sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past six months, shares of East West Bancorp have gained 5.9%, while that of Zions have rallied 14.4%.
Over the past 60 days, the Zacks Consensus Estimate for East West Bancorp’s current-year earnings has been revised 6.6% upward, while the same for Zions has moved 6.9% north.