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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Webster Financial Corporation (XNYS:WBS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WBS
Name:
WEBSTER FINANCIAL CORPORATION (XNYS:WBS)
Sector:
-
Industry:
Banks�Regional
CEO:
Mr. John Ciulla
Total Employees:
3,245
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -25.35% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WEBSTER FINANCIAL CORPORATION(WBS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
45.81
One Month Price Target:
$46.13
Six Month Price Target :
$47.75
Likely Price in One Year's Time:
Ticker:
$49.69
Likely Trading Range Today Under (Normal Volatility)
$45.56
Price Upper limit ($) :
$46.1
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$42.59
This week:
$38.6
This month :
$31.39
Other Primary facts
Market Cap:
7.91B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
175.83M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.6%
-20.62%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$60.78
$53.92
$30.84
$37.70
Medium risk (<10%) entry points
Buy Call
Sell Call
$51.69
Buy Put:
Sell Put:
$50.23
$39.91
$41.39
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WBS
Sharpe Ratio:
1.10%
Comparison:
WBS, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -10.38% lower than the industry
& is -51.70% lower than the market/S&P 500 average
Average Returns/Yield of
WBS
Daily returns:
0.05%
Weekly returns:
0.23%
Monthly returns:
0.94%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 3.01% above industry average
Classification:
WBS, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.37
Statistical test of Returns:
WBS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.45%
Weekly Volatility:
7.72%
Monthly Volatility:
15.43%
Yearly Volatility:
53.45%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.67%
Volatility in last five trading days has been -80.72% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.04%
Weekly VaR:
-15.74%
Monthly VaR:
-31.48%
How Much Can the price of
WBS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$33.30
This translates to price declining to:
$6.87
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
WBS is a 122.18% riskier investment compared to the market/S&P 500 & is 90.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 20.78% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WBS
Beta in relation to market/S&P 500--1.26
Expected beta in 1 year's time:
0.793
Expected beta in 3 year's time:
1.121
Unlevered (debt free) Beta:
1.144
Beta in relation to Nasdaq (XNAS):
0.98
Beta in relation to all global stocks::
1.159
Beta Comparison & Analysis
Beta of competitors/peers::
1.081
Beta is 16.52% higher than peers
Average Industry Beta:
0.964
Beta is 30.72% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.89%
Sustainable growth rate is -13.60% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.005
Alpha is -146.48% below industry average alpha yield
Alpha is -34% below the market average
Analysis of Cost of Capital of
WBS
Equity cost of capital:
0.118
Equity cost of capital is 20.80% above industry mean WACC
Unlevered (without debt) cost of capital:
10.70%
Before-tax cost of debt:
11.05%
After-tax cost of debt:
8.73%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
8.73%
WACC is 2.09% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.60
Revenue growth rate per share of (3Y):
0.99
Annual revenue growth rate is -83.21% below industry average
EPS:
$3.11
Expected Annual growth rate of EPS (3Y):
2.79%
Expected future EPS growth rate is -76.81% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$5.12
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is -358.25% lower than the industry
Debt per share
$6.13
EBITDA per share
$5.52
Valuation Analysis Today of
WBS
P/E Ratio:
14.75
P/E Ratio of Competitors/Peers:
7.16
P/E ratio is 105.85% higher than main peers & is 18.84% higher than the industry
Stock price/value with industry average P/E ratio: $38.59
WBS is 18.71% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $22.58
Present value of the expected future dividends only: $13.58
P/S (Price to Sales ratio):
6.94
Price to sales ratio is 62.33% above the industry mean
P/B (Price to book value ratio):
0.99
Price to free cash flow: 8.95
Price to free cash flow ratio is -65.23% lower than the industry
Net income growth rate (3Y):
15.76%
Net income growth rate is -71.38% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.16%
Dividend yeild: 3.49%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.60
-
-
Average dividend payment (long-term): $0.40
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 08/10/2022
-
Previous dividend payment date: 27/05/2022
Previous dividend record date: 05/12/2022
-
Dividend History:
2022-05-11--$0.40
2021-11-08--$0.40
2021-05-04--$0.40
2022-01-27--$0.40
2021-08-02--$0.40
2021-02-08--$0.40
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
13.19%
Net debt to equity ratio:
10.25%
Debt to assets ratio:
1.66%
Net debt to assets ratio:
1.29%
Debt-to-asset ratio is -99.01% below industry average
Ability to repay debt:
Interest coverage ratio:
8.14
Interest coverage ratio is 882.48% more than industry average
Looking forward:
Debt growth rate:
-33.19%
Annual debt growth is -10582% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.667
Statistical significance of correlation:
WBS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 33.21% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.04
Covariance of price movement with the market:
0.079
Kurtosis
6.012
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.167
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WBS
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
23.29%
Effective tax rate is 8.07% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.19%
Return on equity (ROE) is -39.74% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.90%
Return on assets (ROA) is -60.84% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 4.7 years
Stock based compensation to net income ratio:
-3.23%
In-depth Efficiency Analysis
Revenue generated per employee:
357.6K
Each employee generates -6% less revenue than industry average revenue per employee
EBITDA generated per employee:
299.1K
Each employee generates 32% more EBITDA than industry average revenue per employee
Profit generated per employee:
181.2K
Each employee generates 28% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.0K
-
Assets/Capital per employee
1.0M
-
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WBS
UNUM GROUP (XNYS:UNM)
OWL ROCK CAPITAL CORPORATION (XNYS:ORCC)
Grupo Aval Acciones y Valores SA (XNYS:AVAL)
HAGERTY, INC. (XNYS:HGTY)
ARES-PA
SNV-PD
PRIMERICA, INC. (XNYS:PRI)
EVERCORE INC. (XNYS:EVR)
NEW YORK COMMUNITY BANCORP, INC. (XNYS:NYCB)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�33%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.16B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
324.23M
333.77M
9.55M
-
-
707.27M
119.19M
158.63M
970.51M
-
587.86M
450.21M
104.84M
587.86M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
- 18967.00K
Change in Working Capital :
18.97M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
-
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
240.44M
8.74B
8.99B
1.41B
-
-
10.40B
490.00M
2.51B
224.58M
-
178.04M
-
3.41B
58.14B
65.13B
-
-
-
-
-
-
1.08B
-
1.08B
58.03B
56.95B
-
2.28B
- 275723.0K
6.18B
March 31, 2022 at 6:00:00 AM
-
8.18B
65.13B
-
1.08B
837.8M
-
-
-
-
5.04B
- 122205.00K
- 36234.00K
- 4009706.00K
873.04M
-
331.64M
793.21M
-
-
-
-
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WBS
2023
2024
2025
2026
2027
$48.57
$52.68
$57.14
$61.97
$67.22