Waterstone Financial, Inc. (NASDAQ: WSBF)

Sector: Financial Services Industry: Banks - Regional CIK: 0001569994
Market Cap 292.67 Mn
P/B 0.85
P/E 12.25
P/S 2.14
ROIC (Qtr) 2.94
Div Yield % 4.57
Rev 1y % (Qtr) 8.31
Total Debt (Qtr) 469.06 Mn
Debt/Equity (Qtr) 1.36

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 44.44M provides strong 100.77x coverage of stock compensation 441000, indicating sustainable incentive practices.
  • Strong tangible asset base of 2.27B provides 4.84x coverage of total debt 469.06M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 43.47M exceeds capital expenditure of 973000 by 44.67x, indicating strong organic growth funding capability.
  • Operating cash flow of 44.44M provides strong 3.06x coverage of operating expenses 14.54M, showing operational efficiency.
  • Retained earnings of 287.87M represent substantial 0.83x of equity 345.50M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 44.44M barely covers its investment activities of (38.30M), with a coverage ratio of -1.16, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 44.44M provides thin coverage of dividend payments of (10.89M) with a -4.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 43.47M represents just -0.47x of debt issuance (92.03M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 287.87M provide limited buffer against comprehensive income items of (13.29M), which is -21.67x, indicating elevated exposure to market risks.
  • Operating cash flow of 44.44M is outpaced by equity issuance of (12.99M) (-3.42 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.30 0.14
EV to Cash from Ops. EV/CFO 15.47 7.21
EV to Debt EV to Debt 1.47 5.20
EV to EBIT EV/EBIT 23.23 14.98
EV to EBITDA EV/EBITDA 21.45 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 15.82 8.87
EV to Market Cap EV to Market Cap 2.35 1.04
EV to Revenue EV/Rev 5.02 -3.76
Price to Book Value [P/B] P/B 0.85 1.17
Price to Earnings [P/E] P/E 12.25 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.19 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 44.80 35.28
Dividend per Basic Share Div per Share (Qtr) 0.60 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 24.35 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 16.27 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 29.85 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 77.85 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 59.36 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 72.08 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 72.08 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 81.08 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 93.43 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.87 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.06 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.24 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 1.36 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 23.40 147.97
EBIT Margin % EBIT Margin % (Qtr) 21.60 155.41
EBT Margin % EBT Margin % (Qtr) 21.60 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 17.40 115.63