NasdaqGM:NEWT

Stock Analysis Report

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Executive Summary

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. More Details


Snowflake Analysis

Very undervalued with acceptable track record.


Similar Companies

Share Price & News

How has Newtek Business Services's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NEWT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.7%

NEWT

2.4%

US Capital Markets

2.3%

US Market


1 Year Return

-14.5%

NEWT

9.9%

US Capital Markets

17.2%

US Market

Return vs Industry: NEWT underperformed the US Capital Markets industry which returned 7.6% over the past year.

Return vs Market: NEWT underperformed the US Market which returned 15.8% over the past year.


Shareholder returns

NEWTIndustryMarket
7 Day2.7%2.4%2.3%
30 Day-2.5%-5.0%-4.6%
90 Day3.3%0.9%7.4%
1 Year-2.8%-14.5%12.7%9.9%19.8%17.2%
3 Year41.0%3.8%17.3%8.2%37.4%28.3%
5 Year102.1%-1.0%68.1%46.4%83.8%63.0%

Price Volatility Vs. Market

How volatile is Newtek Business Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Newtek Business Services undervalued compared to its fair value and its price relative to the market?

23.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NEWT ($18.45) is trading below our estimate of fair value ($24.25)

Significantly Below Fair Value: NEWT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NEWT is good value based on its PE Ratio (9x) compared to the US Capital Markets industry average (22.4x).

PE vs Market: NEWT is good value based on its PE Ratio (9x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: NEWT is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: NEWT is good value based on its PB Ratio (1.2x) compared to the US Capital Markets industry average (4.1x).


Next Steps

Future Growth

How is Newtek Business Services forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEWT's forecast earnings growth (11.1% per year) is above the savings rate (2.2%).

Earnings vs Market: NEWT's earnings (11.1% per year) are forecast to grow slower than the US market (22.8% per year).

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

Revenue vs Market: NEWT's revenue is expected to decline over the next 3 years (-32.3% per year).

High Growth Revenue: NEWT's revenue is forecast to decline over the next 3 years (-32.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NEWT's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Newtek Business Services performed over the past 5 years?

8.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NEWT has a large one-off gain of $19.2M impacting its June 30 2020 financial results.

Growing Profit Margin: NEWT's current net profit margins (44.3%) are lower than last year (68.5%).


Past Earnings Growth Analysis

Earnings Trend: NEWT's earnings have grown by 8.6% per year over the past 5 years.

Accelerating Growth: NEWT's earnings growth over the past year (10.4%) exceeds its 5-year average (8.6% per year).

Earnings vs Industry: NEWT earnings growth over the past year (10.4%) exceeded the Capital Markets industry 6.1%.


Return on Equity

High ROE: NEWT's Return on Equity (12.7%) is considered low.


Next Steps

Financial Health

How is Newtek Business Services's financial position?


Financial Position Analysis

Short Term Liabilities: NEWT's short term assets ($60.9M) exceed its short term liabilities ($36.1M).

Long Term Liabilities: NEWT's short term assets ($60.9M) do not cover its long term liabilities ($402.5M).


Debt to Equity History and Analysis

Debt Level: NEWT's debt to equity ratio (117.5%) is considered high.

Reducing Debt: NEWT's debt to equity ratio has increased from 69.4% to 117.5% over the past 5 years.

Debt Coverage: NEWT's debt is not well covered by operating cash flow (2.2%).

Interest Coverage: NEWT's interest payments on its debt are not well covered by EBIT (2.3x coverage).


Balance Sheet


Next Steps

Dividend

What is Newtek Business Services's current dividend yield, its reliability and sustainability?

11.66%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NEWT's dividend (11.66%) is higher than the bottom 25% of dividend payers in the US market (1.71%).

High Dividend: NEWT's dividend (11.66%) is in the top 25% of dividend payers in the US market (4.83%)


Stability and Growth of Payments

Stable Dividend: NEWT has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: NEWT's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (111.4%), NEWT's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Barry Sloane (60 yo)

21.67yrs

Tenure

US$1,400,000

Compensation

Mr. Barry Scott Sloane has been the Chairman and Chief Executive Officer of Newtek Business Services Corp. since 1999 and serves as its President since 2008. Mr. Sloane served as Secretary of Newtek Busine ...


CEO Compensation Analysis

Compensation vs Market: Barry's total compensation ($USD1.40M) is below average for companies of similar size in the US market ($USD2.02M).

Compensation vs Earnings: Barry's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Barry Sloane
Chairman21.67yrsUS$1.40m4.98%
$ 19.4m
Christopher Towers
Executive VP & Chief Accounting Officer1.33yrsUS$265.00k0.0059%
$ 22.9k
Michael Schwartz
Chief Legal Officer5.67yrsUS$565.00k0.088%
$ 342.6k
Peter Downs
Chief Lending Officer & Director5.83yrsUS$646.67k0.18%
$ 713.4k
Brent Ciurlino
Senior Vice President of Risk & Operations1.42yrsno datano data
Jayne Cavuoto-Krafchik
Director of Investor Relationsno datano datano data
Brian Moon
Treasurer & Senior VP of Corporate Development1.42yrsno datano data
Timothy Ihlefeld
Executive Vice President of Strategic Alliances and Chief Sales Officer3.83yrsno datano data
Albert Spada
Executive Vice President of Small Business Lending1.42yrsno datano data
Frank Bertelle
Chief Operating Officer of Newtek Business Credit1.42yrsno datano data
John Cox
Chairman & CEO of Newtek Small Business Finance17.75yrsUS$250.00kno data
Chris Rowland
Director of Acquisitionsno datano datano data

2.6yrs

Average Tenure

59.5yo

Average Age

Experienced Management: NEWT's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Barry Sloane
Chairman21.67yrsUS$1.40m4.98%
$ 19.4m
Peter Downs
Chief Lending Officer & Director5.83yrsUS$646.67k0.18%
$ 713.4k
John Cox
Chairman & CEO of Newtek Small Business Finance17.75yrsUS$250.00kno data
Gregory Zink
Independent Director3.5yrsUS$155.00k0.079%
$ 310.7k
Richard Salute
Independent Director5.42yrsUS$155.00k0.077%
$ 301.8k
Salvatore Mulia
Independent Director15.67yrsUS$155.00k0.32%
$ 1.3m

10.8yrs

Average Tenure

67.5yo

Average Age

Experienced Board: NEWT's board of directors are seasoned and experienced ( 10.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: NEWT insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.6%.


Top Shareholders

Company Information

Newtek Business Services Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Newtek Business Services Corp.
  • Ticker: NEWT
  • Exchange: NasdaqGM
  • Founded: 2013
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$390.836m
  • Shares outstanding: 21.18m
  • Website: https://www.newtekone.com

Number of Employees


Location

  • Newtek Business Services Corp.
  • 4800 T-Rex Avenue
  • Suite 120
  • Boca Raton
  • Florida
  • 33431
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NEWTNasdaqGM (Nasdaq Global Market)YesCommon SharesUSUSDNov 1972
1N31DB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1972
0K7XLSE (London Stock Exchange)YesCommon SharesGBUSDNov 1972

Biography

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/30 00:38
End of Day Share Price2020/09/29 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.