Financial Analysis: Westpac Banking (WEBNF) versus The Competition

Westpac Banking (OTCMKTS:WEBNF) is one of 930 publicly-traded companies in the “Banks” industry, but how does it contrast to its rivals? We will compare Westpac Banking to similar companies based on the strength of its analyst recommendations, valuation, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Westpac Banking and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westpac Banking	0	2	0	0	2.00
Westpac Banking Competitors	7373	29681	26901	1332	2.34

As a group, “Banks” companies have a potential upside of 3.56%. Given Westpac Banking’s rivals stronger consensus rating and higher probable upside, analysts clearly believe Westpac Banking has less favorable growth aspects than its rivals.

Profitability

This table compares Westpac Banking and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westpac Banking	N/A	N/A	N/A
Westpac Banking Competitors	14.93%	9.57%	0.92%

Insider and Institutional Ownership

13.9% of Westpac Banking shares are owned by institutional investors. Comparatively, 47.7% of shares of all “Banks” companies are owned by institutional investors. 9.8% of shares of all “Banks” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Westpac Banking and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Westpac Banking	N/A	N/A	11.12
Westpac Banking Competitors	$19.08 billion	$2.37 billion	26.78

Westpac Banking’s rivals have higher revenue and earnings than Westpac Banking. Westpac Banking is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Westpac Banking pays an annual dividend of C$1.78 per share and has a dividend yield of 6.7%. Westpac Banking pays out 74.6% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.8% and pay out 32.4% of their earnings in the form of a dividend. Westpac Banking lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Westpac Banking rivals beat Westpac Banking on 13 of the 13 factors compared.

Westpac Banking Company Profile

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, and internationally. The company operates through Consumer, Business, Consumer and Business Banking, Westpac Institutional Bank, Specialist Businesses, and Westpac New Zealand segments. It offers savings, term deposit, business transaction, not-for-profit transaction, foreign currency, farm management deposit, project and retention trust, and statutory trust accounts; home, personal, business, and commercial loans; car and equipment finance; business overdrafts and bank guarantees; debit and credit cards; international and travel services; share trading services; investment products; and home, car, travel, life, caravan and trailer, credit card and loan repayment, boat, and business insurance products. In addition, the company provides corporate and institutional, transaction banking, financial market, corporate and structured finance, trade and supply chain financing, and industry specific banking and treasury services, as well as online banking services. It serves individuals; small, and medium enterprises; commercial and agribusiness; and private wealth clients; and corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. Westpac Banking Corporation was founded in 1817 and is based in Sydney, Australia.