On Sep 9, 2013, we reaffirmed our Outperform recommendation on
Washington Federal Inc.
). Our decision rests on the company's consistent improvement in
asset quality and efficient capital deployment activities.
Moreover, Washington Federal's fiscal third-quarter earnings
marginally beat the Zacks Consensus Estimate as well.
On Jul 18, Washington Federal reported fiscal third-quarter 2013
earnings per share of 36 cents, beating the Zacks Consensus
Estimate of 33 cents. Results were driven by a rise in other
income, partially offset by lower net interest income and
increased operating expenses.
The Zacks Consensus Estimate for 2013 advanced 4.5% to $1.39 per
share over the last 60 days. Further, for 2014, the Zacks
Consensus Estimate increased 12.1% to $1.48 per share over the
same time period. As a result, Washington Federal currently
carries a Zacks Rank #2 (Buy).
Washington Federal displays a long-term upward trend in its loan
and deposit growth. On further improvement in the market
scenario, demand for loans will continue to increase. The
company's credit quality has also been improving, with the
contraction of nonperforming assets and net charge-offs.
Efficient capital deployment in the form of regular dividend
hikes and share buybacks is one of the strengths of Washington
Federal. We expect management to continue deploying excess
capital to enhance shareholder value in the forthcoming quarters.
Moreover, Washington Federal is gaining more market share through
strategic acquisitions. Considering its strong capital and
liquidity position, we believe that the company is well-poised to
continue expanding through acquisitions.
Other Stocks Worth Considering
Some better-performing banks include
1st Century Bancshares, Inc.
Flushing Financial Corp.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
BANNER CORP (BANR): Free Stock Analysis
1ST CENTURY BCS (FCTY): Free Stock Analysis
FLUSHING FINL (FFIC): Free Stock Analysis
WASH FEDL INC (WAFD): Free Stock Analysis
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