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Here's Why West Bancorp (WTBA) Stock is Worth Betting on Now
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It seems to be a wise idea to add West Bancorporation, Inc. (WTBA - Free Report) stock to your portfolio now amid the coronavirus pandemic, given the strength in its fundamentals and solid prospects. Moreover, its steady capital-deployment activities reflect a strong balance-sheet position.
Further, analysts are bullish on the stock. Over the past 60 days, the Zacks Consensus Estimate for earnings moved 13.9% and 10.5% upward for 2020 and 2021, respectively. The company currently sports a Zacks Rank #1 (Strong Buy).
Shares of West Bancorp have lost 22.5% in the past 12 months compared with the industry's 31% fall.
Factors That Make West Bancorp a Solid Pick
Earnings Growth: Over the past three to five years, West Bancorp has recorded earnings growth of 7.1%. The momentum is likely to continue in the near term, indicated by the projected earnings growth rate of 17.8% for 2020 (against the projection of a 19.7% decline for the industry) and 2.4% for 2021.
Revenue Strength: West Bancorp’s total net revenues have witnessed a CAGR of 4.3% over the last three years (2017-2019). The company’s projected sales growth of 14.3% for 2020 (against the projection of no growth for the industry) and 2.1% for 2021 highlight its revenue strength.
Solid Balance-Sheet Position: As of Mar 31, 2020, West Bancorp had total debt worth $255.3 million, lower than the cash & cash equivalents balance of $65.3 million. The current total debt to total capital of 52.6% is below the industry average. Also, the company's times-interest-earned ratio of 6.4 at the end of first-quarter 2020 compares favorably with the industry average, and has improved on a sequential basis. These imply that the company carries a relatively lesser credit risk and is likely to meet interest and/or debt obligations even if the economic situation worsens.
Steady Capital Deployment: West Bancorp’s capital-deployment activities are impressive. The company has been increasing its quarterly dividends since 2009. Moreover, the company has maintained its dividend payout at 21 cents per share amid these uncertain times. Thus, given the earnings strength and strong balance-sheet position, the company will likely be able to keep paying dividend at the current rate.
Superior ROE: West Bancorp’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 14.60% compares favorably with the industry’s 7.79%, underlining that it is more efficient in using shareholder funds than its peers.
Stock Looks Undervalued: West Bancorp looks undervalued, with respect to the price/earnings (P/E) (F1) ratio. It has a P/E (F1) ratio of 8.13, which is below the industry average of 11.23.
Additionally, the stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount.
Favorable VGM Score: West Bancorp has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Stocks to Consider
ESSA Bancorp, Inc. (ESSA - Free Report) witnessed an upward earnings estimate revision of 5.5% for 2020 over the past 30 days. Its shares have lost 17.7% over the past year. At present, it carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
TFS Financial Corporation (TFSL - Free Report) has witnessed 4.5% upward earnings estimate revision for the ongoing year in the past 30 days. This Zacks #2 Ranked stock has lost 17% over the past year.
Prospect Capital Corporation (PSEC - Free Report) witnessed an upward earnings estimate revision of 12.5% for current year over the past 30 days. Its shares have lost 24.9% over the past year. At present, it carries a Zacks Rank of 2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Here's Why West Bancorp (WTBA) Stock is Worth Betting on Now
It seems to be a wise idea to add West Bancorporation, Inc. (WTBA - Free Report) stock to your portfolio now amid the coronavirus pandemic, given the strength in its fundamentals and solid prospects. Moreover, its steady capital-deployment activities reflect a strong balance-sheet position.
Further, analysts are bullish on the stock. Over the past 60 days, the Zacks Consensus Estimate for earnings moved 13.9% and 10.5% upward for 2020 and 2021, respectively. The company currently sports a Zacks Rank #1 (Strong Buy).
Shares of West Bancorp have lost 22.5% in the past 12 months compared with the industry's 31% fall.
Factors That Make West Bancorp a Solid Pick
Earnings Growth: Over the past three to five years, West Bancorp has recorded earnings growth of 7.1%. The momentum is likely to continue in the near term, indicated by the projected earnings growth rate of 17.8% for 2020 (against the projection of a 19.7% decline for the industry) and 2.4% for 2021.
Revenue Strength: West Bancorp’s total net revenues have witnessed a CAGR of 4.3% over the last three years (2017-2019). The company’s projected sales growth of 14.3% for 2020 (against the projection of no growth for the industry) and 2.1% for 2021 highlight its revenue strength.
Solid Balance-Sheet Position: As of Mar 31, 2020, West Bancorp had total debt worth $255.3 million, lower than the cash & cash equivalents balance of $65.3 million. The current total debt to total capital of 52.6% is below the industry average. Also, the company's times-interest-earned ratio of 6.4 at the end of first-quarter 2020 compares favorably with the industry average, and has improved on a sequential basis. These imply that the company carries a relatively lesser credit risk and is likely to meet interest and/or debt obligations even if the economic situation worsens.
Steady Capital Deployment: West Bancorp’s capital-deployment activities are impressive. The company has been increasing its quarterly dividends since 2009. Moreover, the company has maintained its dividend payout at 21 cents per share amid these uncertain times. Thus, given the earnings strength and strong balance-sheet position, the company will likely be able to keep paying dividend at the current rate.
Superior ROE: West Bancorp’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 14.60% compares favorably with the industry’s 7.79%, underlining that it is more efficient in using shareholder funds than its peers.
Stock Looks Undervalued: West Bancorp looks undervalued, with respect to the price/earnings (P/E) (F1) ratio. It has a P/E (F1) ratio of 8.13, which is below the industry average of 11.23.
Additionally, the stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount.
Favorable VGM Score: West Bancorp has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Other Stocks to Consider
ESSA Bancorp, Inc. (ESSA - Free Report) witnessed an upward earnings estimate revision of 5.5% for 2020 over the past 30 days. Its shares have lost 17.7% over the past year. At present, it carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
TFS Financial Corporation (TFSL - Free Report) has witnessed 4.5% upward earnings estimate revision for the ongoing year in the past 30 days. This Zacks #2 Ranked stock has lost 17% over the past year.
Prospect Capital Corporation (PSEC - Free Report) witnessed an upward earnings estimate revision of 12.5% for current year over the past 30 days. Its shares have lost 24.9% over the past year. At present, it carries a Zacks Rank of 2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>