WBS

Webster Financial Corp (Conn)

Finance/Real Estate


Presented:01/09/2019
Price:$50.64
Cap:$4.67B
Current Price:$48.93
Cap:$8.39B

Presented

Date01/09/2019
Price$50.64
Market Cap$4.67B
Ent Value$7.59B
P/E Ratio14.49x
Book Value$28.99
Div Yield2.61%
Shares O/S92.24M
Ave Daily Vol590,667
Short Int4.14%

Current

Price$48.93
Market Cap$8.39B
Webster Financial Corp. operates as a holding company for Webster Bank NA. It engages in providing financial services to individuals, families and businesses. It offers equipment financing, commercial real estate lending and asset-based lending services. It operates through the following business segments: Commercial Banking, HSA Bank andCommunity Banking, The Commercial Banking segment includes middle market, asset-based lending, commercial real estate, equipment finance and treasury and payment solutions, which includes government and institutional banking. The HSA Bank segment offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions for healthcare. The Community Banking segment serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. It is comprised of personal banking and business banking supported by a distribution network consisting of banking centers and ATMs, a customer care center, telephone banking and a full range of web and mobile-based banking services. The company was founded in 1986 and is headquartered in Waterbury, CT.

Publicly traded companies mentioned herein: HealthEquity Inc (HQY), Webster Financial Corp (WBS)

Highlights

The key driver of upside for Webster Financial (WBS) should, in the presenter’s opinion, continue to be growth at HSA Bank. HSA Bank is a division of Webster Bank, and it is one of the largest providers of health savings accounts (HSAs) in the US. This segment accounts for ~25% of pre-tax income, is growing ~50% YoY, and gives WBS a competitive advantage in the market. He is long the stock at this time, ($50), and if/when the path for WBS to earn $4.80 per share in 2020 (~45 cents per share ahead of Street estimates) becomes clearer, the stock could trade up to $72 (assumes 15x).

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Idea Discussion

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