WesBanco has been treading water for the past six months, recording a small loss of 0.9% while holding steady at $30.10. The stock also fell short of the S&P 500’s 21% gain during that period.
Does this present a buying opportunity for WSBC? Or is its underperformance reflective of its story and business quality? Find out in our full research report, it’s free for active Edge members.
Why Does WesBanco Spark Debate?
Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ:WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.
Two Things to Like:
1. Net Interest Income Drives Additional Growth Opportunities
While bank generate revenue from multiple sources, investors view net interest income as a cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of one-time fees.
WesBanco’s net interest income has grown at a 10.5% annualized rate over the last five years, a step above the broader banking industry and faster than its total revenue. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
WesBanco’s EPS grew at an astounding 11.2% compounded annual growth rate over the last five years, higher than its 8.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
One Reason to be Careful:
Substandard TBVPS Growth Indicates Limited Asset Expansion
Tangible book value per share (TBVPS) serves as a key indicator of a bank’s financial strength, representing the hard assets available to shareholders after removing intangible assets that could evaporate during financial distress.
To the detriment of investors, WesBanco’s TBVPS grew at a sluggish 3.1% annual clip over the last two years.
Final Judgment
WesBanco has huge potential even though it has some open questions. With its shares trailing the market in recent months, the stock trades at 0.8× forward P/B (or $30.10 per share). Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More Than WesBanco
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