Webster Financial Corporation
Webster Financial Corporation Fundamental Analysis
Webster Financial Corporation (WBS) shows strong financial fundamentals with a PE ratio of 11.66, profit margin of 22.67%, and ROE of 10.70%. The company generates $4.4B in annual revenue with moderate year-over-year growth of 5.71%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 63.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WBS's fundamental strength across five key dimensions:
Efficiency Score
WeakWBS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentWBS trades at attractive valuation levels.
Growth Score
ModerateWBS shows steady but slowing expansion.
Financial Health Score
ModerateWBS shows balanced financial health with some risks.
Profitability Score
ModerateWBS maintains healthy but balanced margins.
Key Financial Metrics
Is WBS Expensive or Cheap?
P/E Ratio
WBS trades at 11.66 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, WBS's PEG of 1.16 indicates fair valuation.
Price to Book
The market values Webster Financial Corporation at 1.23 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.95 times EBITDA. This is generally considered low.
How Well Does WBS Make Money?
Net Profit Margin
For every $100 in sales, Webster Financial Corporation keeps $22.67 as profit after all expenses.
Operating Margin
Core operations generate 28.49 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.70 in profit for every $100 of shareholder equity.
ROA
Webster Financial Corporation generates $1.19 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Webster Financial Corporation generates strong operating cash flow of $1.64B, reflecting robust business health.
Free Cash Flow
Webster Financial Corporation generates strong free cash flow of $1.60B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.89 in free cash annually.
FCF Yield
WBS converts 13.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.66
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.16
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.23
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.66
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.41
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How WBS Stacks Against Its Sector Peers
| Metric | WBS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.66 | 18.86 | Better (Cheaper) |
| ROE | 10.70% | 847.00% | Weak |
| Net Margin | 22.67% | 4202.00% | Weak |
| Debt/Equity | 0.45 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.41 | 667.17 | Weak Liquidity |
| ROA | 1.19% | -21543.00% (disorted) | Weak |
WBS outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Webster Financial Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
56.19%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
8.39%
Industry Style: Value, Dividend, Cyclical
GrowingFCF CAGR
149.41%
Industry Style: Value, Dividend, Cyclical
High Growth