Arrow Financial Corp (AROW) stock analysis

P/E above its 5-year median

Arrow Financial's P/E of 14.6 is above its own 5-year median of 12.6.

P/E above the industry

Arrow Financial's P/E of 14.6 is above the Commercial Banks median of 12.1.

P/S against the industry

Not enough revenue data to compare.

P/B above the industry

Arrow Financial's price-to-book of 1.39 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $38.62 is above our fair value estimate of $34.12.

Margin of safety under 20%

The price is 13.2% above fair value, so there is no margin of safety.

Revenue growth over 3 years

Needs three years of positive revenue.

EPS growing under 10% a year

Diluted EPS grew -2.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 28.3% over the last twelve months, against a 5-year average of 1.5% a year.

Growth against the industry

Needs revenue for this year and last.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 9.5% over the last twelve months and averaged 10.8% over five years; we look for 15% on both.

Return on assets under 1%

Return on assets was 0.9%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Arrow Financial's return on equity of 9.5% is below the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 1.5% a year on average over the last five fiscal years.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

Well capitalized

Equity is 9.3% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 86.6% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.0% of loans; we look for at least 1%.

Efficient operations

Needs non-interest expense and revenue.

Deposits growing

Deposits grew 15.6% over the past year.

Modest borrowings

Borrowings other than deposits are 36.0% of equity.

Pays a dividend

Arrow Financial paid dividends worth 3.9% of the share price over the last twelve months.

Yield below Treasuries

The 3.9% yield is below the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Arrow Financial yields 3.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.