Critical Review: Webster Financial (WBS) versus Its Rivals
Webster Financial (NYSE: WBS) is one of 305 public companies in the “Banks” industry, but how does it contrast to its peers? We will compare Webster Financial to similar businesses based on the strength of its earnings, dividends, analyst recommendations, valuation, risk, institutional ownership and profitability.
Institutional & Insider Ownership
93.5% of Webster Financial shares are owned by institutional investors. Comparatively, 52.2% of shares of all “Banks” companies are owned by institutional investors. 2.2% of Webster Financial shares are owned by insiders. Comparatively, 10.4% of shares of all “Banks” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for Webster Financial and its peers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Webster Financial Competitors||2159||8377||8436||332||2.36|
Webster Financial currently has a consensus target price of $54.88, indicating a potential downside of 3.34%. As a group, “Banks” companies have a potential upside of 2.47%. Given Webster Financial’s peers stronger consensus rating and higher probable upside, analysts plainly believe Webster Financial has less favorable growth aspects than its peers.
This table compares Webster Financial and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Webster Financial Competitors||18.68%||8.36%||0.93%|
Valuation and Earnings
This table compares Webster Financial and its peers top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Webster Financial||$1.09 billion||$207.12 million||22.44|
|Webster Financial Competitors||$5.50 billion||$827.87 million||379.23|
Webster Financial’s peers have higher revenue and earnings than Webster Financial. Webster Financial is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Webster Financial pays an annual dividend of $1.04 per share and has a dividend yield of 1.8%. Webster Financial pays out 41.1% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 2.0% and pay out 35.2% of their earnings in the form of a dividend. Webster Financial has increased its dividend for 6 consecutive years. Webster Financial lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.
Volatility & Risk
Webster Financial has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Webster Financial’s peers have a beta of 0.79, meaning that their average stock price is 21% less volatile than the S&P 500.
Webster Financial peers beat Webster Financial on 11 of the 15 factors compared.
Webster Financial Company Profile
Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.
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