Westamerica Bancorporation (WABC) stock analysis

P/E above its 5-year median

Westamerica Bancorporation's P/E of 12.8 is above its own 5-year median of 10.4.

P/E above the industry

Westamerica Bancorporation's P/E of 12.8 is above the Commercial Banks median of 12.1.

P/S above the industry

Westamerica Bancorporation's price-to-sales of 5.46 is above the Commercial Banks median of 3.60.

P/B above the industry

Westamerica Bancorporation's price-to-book of 1.74 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $59.60 is above our fair value estimate of $51.30.

Margin of safety under 20%

The price is 16.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -0.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -7.8% over the last twelve months, against a 5-year average of 7.6% a year.

Growing slower than the industry

Revenue grew -4.6% 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 12.9% over the last twelve months and averaged 16.1% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.9%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Westamerica Bancorporation's return on equity of 12.9% is above the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 7.6% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 43.9% over the last twelve months, against a 5-year average of 45.7%.

Net margin above the industry

Westamerica Bancorporation's net margin of 43.9% is above the Commercial Banks median of 30.3%.

Well capitalized

Equity is 13.6% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 13.4% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.6% of loans; we look for at least 1%.

Efficient operations

Non-interest expense takes 41.1% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 0.5% over the past year.

Modest borrowings

Borrowings other than deposits are 17.6% of equity.

Pays a dividend

Westamerica Bancorporation paid dividends worth 3.2% of the share price over the last twelve months.

Yield below Treasuries

The 3.2% 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; Westamerica Bancorporation yields 3.2%.

Dividend not cut

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

Covered by earnings

Dividends take 40.7% of net income.

Covered by free cash flow

Dividends take 39.9% of free cash flow.