Washington Federal Reiterated at Outperform - Analyst Blog
September 10 2013 - 10:20AM
Zacks
On Sep 9, 2013, we reaffirmed our Outperform recommendation on
Washington Federal Inc. (WAFD). Our decision rests
on the company’s consistent improvement in asset quality and
efficient capital deployment activities. Moreover, Washington
Federal’s fiscal third-quarter earnings marginally beat the Zacks
Consensus Estimate as well.
Why Neutral?
On Jul 18, Washington Federal reported fiscal third-quarter 2013
earnings per share of 36 cents, beating the Zacks Consensus
Estimate of 33 cents. Results were driven by a rise in other
income, partially offset by lower net interest income and increased
operating expenses.
The Zacks Consensus Estimate for 2013 advanced 4.5% to $1.39 per
share over the last 60 days. Further, for 2014, the Zacks Consensus
Estimate increased 12.1% to $1.48 per share over the same time
period. As a result, Washington Federal currently carries a Zacks
Rank #2 (Buy).
Washington Federal displays a long-term upward trend in its loan
and deposit growth. On further improvement in the market scenario,
demand for loans will continue to increase. The company’s credit
quality has also been improving, with the contraction of
nonperforming assets and net charge-offs.
Efficient capital deployment in the form of regular dividend hikes
and share buybacks is one of the strengths of Washington Federal.
We expect management to continue deploying excess capital to
enhance shareholder value in the forthcoming quarters. Moreover,
Washington Federal is gaining more market share through strategic
acquisitions. Considering its strong capital and liquidity
position, we believe that the company is well-poised to continue
expanding through acquisitions.
Other Stocks Worth Considering
Some better-performing banks include 1st Century
Bancshares, Inc. (FCTY), Banner
Corporation (BANR) and Flushing Financial
Corp. (FFIC). All these stocks carry a Zacks Rank #1
(Strong Buy).
BANNER CORP (BANR): Free Stock Analysis Report
1ST CENTURY BCS (FCTY): Free Stock Analysis Report
FLUSHING FINL (FFIC): Free Stock Analysis Report
WASH FEDL INC (WAFD): Free Stock Analysis Report
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