5 Reasons to Bet on WSFS Financial (WSFS) Stock Right Now
Though the U.S. regional banking crisis earlier this year hurt investor sentiments and turned them bearish on the sector, they have regained confidence. Several new macroeconomic data indicate that the Federal Reserve is done raising rates this cycle. Hence, WSFS Financial Corporation WSFS stock looks like a promising investment option now.
Aided by higher interest rates and decent loan demand, WSFS’ top line is expected to improve in the near term. Analysts are optimistic regarding the company’s earnings potential. The Zacks Consensus Estimate for earnings has been revised 7.2% and 1.4% upward for 2023 and 2024, respectively, over the past two months. It currently carries a Zacks Rank #2 (Buy).
Shares of WSFS Financial have gained 16% in the past six months, outperforming the industry’s 5.3% rally.
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Factors That Make WSFS Stock Worth a Look
Earnings Growth: In the last three to five years, WSFS Financial witnessed earnings growth of 11.2%, higher than the industry’s average of 9.4%. The trend is expected to continue in the near term, with earnings projected to rise 5.2% in 2023.
Revenue Strength: WSFS Financial’s revenues witnessed a CAGR of 22.6% over the last five years (2018-2022), with the upward trend continuing in the first three quarters of 2023. In January 2022, the company acquired Bryn Mawr Bank Corporation.
Higher rates, decent loan demand, efforts to bolster fee income and strategic acquisitions continue to support the company’s top-line growth. In 2023, WSFS Financial’s revenues are expected to witness growth of 8.1%.
Solid Capital Distributions: WSFS has been raising dividend payouts on a regular basis. In the last five years, the company hiked dividends thrice. The last increase of 15.4% to 15 cents per share was announced in July 2022.
Also, WSFS Financial has a share repurchase plan in place. In 2020, the company announced authorization to repurchase almost 7.6 million shares. Further, last year, it announced an additional share authorization to buy back 6.4 million shares. As of Sep 30, 2023, nearly 5.6 million shares remained available under the program.
Given the company’s decent liquidity and balance sheet position, its capital distributions seem sustainable going forward.
Superior Return on Equity (ROE): WSFS Financial’s ROE of 13.01% is higher than the industry average of 8.86%. This shows that it reinvests its cash more efficiently than its peers.
Favorable Valuation: WSFS Financial has a Value Score of B. The Value Style Score condenses all valuation metrics into one actionable score, helping investors steer clear of 'value traps' and identify stocks that are truly trading at a discount. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Bank Stocks Worth Considering
A couple of other top-ranked stocks from the banking space are Hilltop Holdings HTH and Byline Bancorp BY.
Earnings estimates for HTH have been revised 2.5% upward for 2023 over the past 30 days to $1.62. The company’s shares have gained 4.6% over the past three months. Hilltop currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Byline Bancorp’s earnings estimates have remained unchanged for the current year at $2.79 over the past 30 days. In three months’ time, BY’s shares have lost 1.7%. The company carries a Zacks Rank #2 at present.
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Hilltop Holdings Inc. (HTH) : Free Stock Analysis Report
WSFS Financial Corporation (WSFS) : Free Stock Analysis Report
Byline Bancorp, Inc. (BY) : Free Stock Analysis Report
