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U.S. Bancorp Message Board

  • gregjanetommax gregjanetommax Mar 14, 2013 11:54 AM Flag

    according to Montly Fool over valued pasted the article. 7% sales growth verses 19% for WFC


    Wells Fargo’s operating margin of 40% compares favorably to the industry average of 34%, with JPMorgan’s(NYSE: JPM) operating margin at 36%. However, JPMorgan's EPS of $5.20 beats Wells’ EPS of $3.36 for 2012. Still, Wells’ EPS beats Citigroup’s (NYSE: C) at $2.44, and Bank of America’s (NYSE: BAC) at $0.25. Even the closest competitor I can find to Wells, U.S. Bancorp (NYSE: USB), is overvalued in comparison. Currently trading at a P/E ratio of 11.6, the company is expected to grow its earnings by a slower 7.8% rate, according to consensus. In other words, USB trades at 9.95 times 2014 earnings (as opposed to 8.9 times for Wells). WFC’s earnings growth of 19.17% against revenue growth rate of 12.72% makes it very appealing. The ROA, which is calculated by multiplying net profit margin by asset turnover, tells us a good deal about how much value is being created from each dollar of assets. In this case, WFC’s ROA of 1.42% beats both its competitors and the industry average. Citi and Bank of America stand at 0.42% and 0.19%, while the industry’s average is 0.88%.

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41.6301+0.0701(+0.17%)11:40 AMEDT