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This Scorching Regional Bank Stock Still Offers Good Value

Canadian Western Bank (TSX:CWB) is an Edmonton-based regional bank that provides personal and business banking products and services primarily in Western Canada. Shares of this regional bank stock have jumped 15% month-over-month as of close on Friday, September 15. The bank stock is up 18% so far in 2023.

This bank released its third quarter (Q3) fiscal 2023 earnings on September 1. Canadian Western delivered adjusted earnings per share (EPS) growth of 19% to $0.88 compared to the previous quarter. Meanwhile, adjusted EPS fell 2% in the year-over-year period. In the first nine months of fiscal 2023, the bank reported net income of $247 million – up 2% compared to the prior year. Moreover, adjusted EPS dropped 3% to $2.64.

In its Q3 2023 report, Canadian Western also provided its outlook for the quarters ahead. The bank stated that higher interest rates would continue to weaken economic growth. However, Canada’s economy is expected to experience a bounce back in the second half of 2024. That is good news for Canadian Western Bank and its peers.

For the rest of fiscal 2023, the bank is projecting loan growth in mid single-digit percentage growth. Moreover, it expects branch-raised deposit growth and pre-tax, pre-provision income growth in low single-digit percentage growth. Canadian Western is also projecting total adjusted EPS between $3.50 and $3.60.

Shares of Canadian Western Bank currently possess an attractive price-to-earnings ratio of 8.7. The bank stock last paid out a quarterly dividend of $0.33 per share. That represents a solid 4.5% yield.

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