NYSE:WBK

Stock Analysis Report

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Executive Summary

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, and internationally. More Details


Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Westpac Banking's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WBK is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: WBK's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

4.9%

WBK

4.5%

US Banks

-0.4%

US Market


1 Year Return

37.9%

WBK

35.5%

US Banks

36.2%

US Market

Return vs Industry: WBK exceeded the US Banks industry which returned 35.4% over the past year.

Return vs Market: WBK exceeded the US Market which returned 36.3% over the past year.


Shareholder returns

WBKIndustryMarket
7 Day4.9%4.5%-0.4%
30 Day16.2%12.1%-2.3%
90 Day26.6%25.4%5.0%
1 Year40.2%37.9%40.3%35.5%39.1%36.2%
3 Year-5.7%-18.5%13.1%3.4%48.4%39.0%
5 Year0.8%-22.6%100.7%75.2%116.6%92.4%

Long-Term Price Volatility Vs. Market

How volatile is Westpac Banking's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Westpac Banking undervalued compared to its fair value and its price relative to the market?

39.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WBK ($19.39) is trading above our estimate of fair value ($12.69)

Significantly Below Fair Value: WBK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WBK is poor value based on its PE Ratio (39x) compared to the US Banks industry average (13.1x).

PE vs Market: WBK is poor value based on its PE Ratio (39x) compared to the US market (21.5x).


Price to Earnings Growth Ratio

PEG Ratio: WBK is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: WBK is overvalued based on its PB Ratio (1.3x) compared to the US Banks industry average (1.1x).


Next Steps

Future Growth

How is Westpac Banking forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

18.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WBK's forecast earnings growth (18.7% per year) is above the savings rate (2%).

Earnings vs Market: WBK's earnings (18.7% per year) are forecast to grow slower than the US market (19.3% per year).

High Growth Earnings: WBK's earnings are forecast to grow, but not significantly.

Revenue vs Market: WBK's revenue (5% per year) is forecast to grow slower than the US market (10% per year).

High Growth Revenue: WBK's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WBK's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has Westpac Banking performed over the past 5 years?

-10.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WBK has high quality earnings.

Growing Profit Margin: WBK's current net profit margins (13.5%) are lower than last year (34.1%).


Past Earnings Growth Analysis

Earnings Trend: WBK's earnings have declined by 10.9% per year over the past 5 years.

Accelerating Growth: WBK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WBK had negative earnings growth (-66.2%) over the past year, making it difficult to compare to the Banks industry average (0.5%).


Return on Equity

High ROE: WBK's Return on Equity (3.4%) is considered low.


Next Steps

Financial Health

How is Westpac Banking's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: WBK's Assets to Equity ratio (13.4x) is moderate.

Allowance for Bad Loans: WBK has a sufficient allowance for bad loans (238%).

Low Risk Liabilities: 70% of WBK's liabilities are made up of primarily low risk sources of funding.

Loan Level: WBK has an appropriate level of Loans to Assets ratio (76%).

Low Risk Deposits: WBK's Loans to Deposits ratio (117%) is appropriate.

Level of Bad Loans: WBK has an appropriate level of bad loans (0.3%).


Next Steps

Dividend

What is Westpac Banking current dividend yield, its reliability and sustainability?

2.49%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WBK's dividend (2.49%) is higher than the bottom 25% of dividend payers in the US market (1.31%).

High Dividend: WBK's dividend (2.49%) is low compared to the top 25% of dividend payers in the US market (3.64%).


Stability and Growth of Payments

Stable Dividend: WBK's dividend payments have been volatile in the past 10 years.

Growing Dividend: WBK's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.6%), WBK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WBK's dividends in 3 years are forecast to be covered by earnings (71.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Peter King (50 yo)

1.25yrs

Tenure

AU$3,562,751

Compensation

Mr. Peter Francis King, BEc, FCA, has been the Chief Executive Officer & Managing Director of Westpac Banking Corporation since April 02, 2020 and served as its Acting Managing Director & Chief Executive O...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD2.77M) is below average for companies of similar size in the US market ($USD10.56M).

Compensation vs Earnings: Peter's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Peter King
CEO, MD & Director1.25yrsAU$3.56m0.0036%
A$ 2.6m
Michael Rowland
Chief Financial Officer0.50yrAU$1.22mno data
Leslie Vance
Group Executive of Financial Crime0.75yrAU$1.19m0.0022%
A$ 1.5m
Rebecca Lim
Group General Counsel & Enterprise Executive1.17yrsAU$1.14m0.0012%
A$ 871.6k
Christine Parker
Group Executive of Human Resources9.42yrsAU$1.62m0.00089%
A$ 630.7k
Jason Yetton
Chief Executive of Specialist Businesses & Group Strategy0.83yrAU$1.27mno data
Carolyn McCann
Group Executive of Customer & Corporate Relations2.83yrsAU$1.45m0.0018%
A$ 1.3m
David Stephen
Chief Risk Officer2.42yrsAU$3.65m0.0042%
A$ 3.0m
Guilherme Lima
Chief Executive of Business Division1.25yrsAU$2.75m0.0013%
A$ 892.9k
David McLean
Chief Executive Officer of Westpac New Zealand Limited6.08yrsAU$1.80m0.00026%
A$ 184.2k
Scott Collary
Chief Operating Officer0.33yrno datano data
Andrew Bowden
Head of Investor Relationsno datano datano data

1.3yrs

Average Tenure

50yo

Average Age

Experienced Management: WBK's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Peter King
CEO, MD & Director1.25yrsAU$3.56m0.0036%
A$ 2.6m
John McFarlane
Independent Non Executive Chairman0.92yrAU$503.09k0.0011%
A$ 772.4k
Peter Marriott
Independent Non-Executive Director7.75yrsAU$397.25k0.00060%
A$ 425.2k
Michael Hawker
Independent Non-Executive Director0.25yrno data0.00049%
A$ 347.2k
Christopher Lynch
Independent Non-Executive Director0.50yrAU$26.78k0.00036%
A$ 255.1k
Craig Dunn
Independent Non-Executive Director5.75yrsAU$344.35k0.00041%
A$ 290.5k
Nora Scheinkestel
Independent Non-Executive Directorno datano data0.00014%
A$ 99.2k
Nerida Caesar
Independent Non-Executive Director3.5yrsAU$315.47k0.00037%
A$ 262.2k
Jonathan Nicholson
Chairman of Westpac Foundation8.17yrsno datano data
Steven Harker
Independent Non-Executive Director2yrsAU$327.38k0.00032%
A$ 226.8k
Peter Nash
Independent Non-Executive Director3yrsAU$398.27k0.00042%
A$ 297.6k
Margaret Seale
Independent Non-Executive Director2yrsAU$324.55k0.00063%
A$ 446.4k

2.0yrs

Average Tenure

60.5yo

Average Age

Experienced Board: WBK's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Westpac Banking Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Westpac Banking Corporation
  • Ticker: WBK
  • Exchange: NYSE
  • Founded: 1817
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: AU$91.124b
  • Listing Market Cap: AU$70.864b
  • Shares outstanding: 3.66b
  • Website: https://www.westpac.com.au

Number of Employees


Location

  • Westpac Banking Corporation
  • 275 Kent Street
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WBKNYSE (New York Stock Exchange)SPONSORED ADRUSUSDMar 1989
WBCCDB (Deutsche Boerse AG)SPONSORED ADRDEEURMar 1989
0LVVLSE (London Stock Exchange)SPONSORED ADRGBUSDMar 1989
WEBN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
WBCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
WBCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
WBCNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJan 1992
WBCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
WBKBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1/3 ADR(REP 1 ORD NPV)ARARSDec 2007
WBCPEASX (Australian Securities Exchange)FRN CNV PERP AUD1000AUAUDMay 2014
WBCPHASX (Australian Securities Exchange)FRN CNV PERP AUD1000AUAUDMar 2018
WBCPIASX (Australian Securities Exchange)FRN SUB MTN PERP AUD1000 '6'AUAUDDec 2018

Biography

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, and internationally. The company operates through four divisions: Consumer, Business, Westpac Institut...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/06 23:33
End of Day Share Price2021/03/05 00:00
Earnings2020/09/30
Annual Earnings2020/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.