Burke & Herbert Financial Services Corp. (BHRB) stock analysis

P/E below its 5-year median

Burke & Herbert Financial Services's P/E of 11.7 is below its own 5-year median of 13.2.

P/E below the industry

Burke & Herbert Financial Services's P/E of 11.7 is below the Commercial Banks median of 12.1.

P/S above the industry

Burke & Herbert Financial Services's price-to-sales of 3.60 is above the Commercial Banks median of 3.60.

P/B below the industry

Burke & Herbert Financial Services's price-to-book of 1.24 is below the Commercial Banks median of 1.29.

Trading below fair value

The share price of $71.00 is below our fair value estimate of $74.04.

Margin of safety under 20%

The price is 4.1% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 41.5% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew 9.4% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 17.7% over the last twelve months; the Commercial Banks median is 11.3%.

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 10.5% over the last twelve months and averaged 10.4% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.1%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Burke & Herbert Financial Services's return on equity of 10.5% is below the Commercial Banks median of 11.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 26.0% over the last twelve months, against a 5-year average of 27.3%.

Net margin below the industry

Burke & Herbert Financial Services's net margin of 26.0% is below the Commercial Banks median of 30.3%.

Well capitalized

Equity is 10.5% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 89.0% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.2% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 67.3% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 39.7% over the past year.

Modest borrowings

Borrowings other than deposits are 45.5% of equity.

Pays a dividend

Burke & Herbert Financial Services paid dividends worth 3.1% of the share price over the last twelve months.

Yield below Treasuries

The 3.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Burke & Herbert Financial Services yields 3.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Covered by earnings

Dividends take 38.3% of net income.

Covered by free cash flow

Dividends take 41.9% of free cash flow.