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Reasons to Add Wells Fargo (WFC) Stock to Your Portfolio Now
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Adding Wells Fargo & Company (WFC - Free Report) stock to your portfolio seems to be a wise idea now. Supported by strong fundamentals, the company is well-poised for growth.
The Zacks Consensus Estimate for Wells Fargo’s 2024 and 2025 earnings have moved 5.7% and 2% north, respectively, indicating that analysts are optimistic regarding its earnings growth potential. WFC currently sports a Zacks Rank #1 (Strong Buy).
In the past six months, the company’s shares have gained 33.4% compared with the industry’s growth of 26%.
Let’s delve into some of the important factors that make WFC stock worth a look.
Earnings Growth: WFC’s earnings have witnessed a rise of 3.8% in the past five years, higher than the industry's growth of 3.2%. The company’s earnings are projected to grow 7.5% in the next five years, suggesting a rise from industry-expected growth of 7.4%. For 2025, the company expects an earnings growth rate of 9.8%.
Impressive Capital Distribution: Wells Fargo has impressive capital deployment activities. Following the clearance of the 2023 stress test, the company raised its dividend by 16.7% to 35 cents per share in July 2023. The company has a share repurchase program in place. Last July, the company’s board of directors authorized a new share repurchase program worth $30 billion. In first-quarter 2024, Wells Fargo repurchased 112.5 million shares for $6.1 billion.
The company has a share repurchase program in place. In the first quarter, Wells Fargo repurchased 112.5 million shares for $6.1 billion. Management expects to buy back more of its common stock in 2024 compared with 2023. As of Mar 31, 2024, the company had approximately $20.7 billion worth of common stock remaining under the buyback plan.
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Given its robust capital position and ample liquidity, the company’s capital-deployment activities seem sustainable and will boost investors’ confidence in the stock.
Expense Management: Wells Fargo’s prudent expense management initiatives support its financials. Since third-quarter 2020, the company has been actively engaged in cost-cutting measures, including the streamlining of its organizational structure, closure of branches and reduction in headcount. Non-interest expenses witnessed a negative CAGR of 1.1% over the last four years (ended 2023). The bank delivered gross expense savings aggregating $10 billion in 2021-2023. The company expects to continue with these efficiency initiatives this year, too.
Strong Balance Sheet: The company has a strong liquidity position, with a liquidity coverage ratio of 126% as of first-quarter 2024, which has been above its regulatory minimum of 100%. Its liquid assets (including cash and due from banks, as well as interest-earning deposits with banks) totaled $269.6 billion as of the same date. It also maintains long-term issuer investment-grade credit ratings of A+, A1 and BBB+ from Fitch, Moody’s and S&P Global, respectively. Given the solid credit profile and liquidity position, it will be able to meet its near-term debt obligations, even if the economic situation worsens.
Other Stocks to Consider
Some other top-ranked bank stocks worth mentioning are Northern Trust Corporation (NTRS - Free Report) and BankUnited, Inc. (BKU - Free Report) .
Northern Trust’s earnings estimates for 2024 have remained unchanged in the past seven days. The company’s shares have gained 3.6% in the past six months. At present, NTRS sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BankUnited’s 2024 earnings estimates have revised upward marginally in the past 30 days. The stock has gained 8.2% in the past three months. Currently, BKU carries a Zacks Rank #2 (Buy).
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Reasons to Add Wells Fargo (WFC) Stock to Your Portfolio Now
Adding Wells Fargo & Company (WFC - Free Report) stock to your portfolio seems to be a wise idea now. Supported by strong fundamentals, the company is well-poised for growth.
The Zacks Consensus Estimate for Wells Fargo’s 2024 and 2025 earnings have moved 5.7% and 2% north, respectively, indicating that analysts are optimistic regarding its earnings growth potential. WFC currently sports a Zacks Rank #1 (Strong Buy).
In the past six months, the company’s shares have gained 33.4% compared with the industry’s growth of 26%.
Let’s delve into some of the important factors that make WFC stock worth a look.
Earnings Growth: WFC’s earnings have witnessed a rise of 3.8% in the past five years, higher than the industry's growth of 3.2%. The company’s earnings are projected to grow 7.5% in the next five years, suggesting a rise from industry-expected growth of 7.4%. For 2025, the company expects an earnings growth rate of 9.8%.
Impressive Capital Distribution: Wells Fargo has impressive capital deployment activities. Following the clearance of the 2023 stress test, the company raised its dividend by 16.7% to 35 cents per share in July 2023. The company has a share repurchase program in place. Last July, the company’s board of directors authorized a new share repurchase program worth $30 billion. In first-quarter 2024, Wells Fargo repurchased 112.5 million shares for $6.1 billion.
The company has a share repurchase program in place. In the first quarter, Wells Fargo repurchased 112.5 million shares for $6.1 billion. Management expects to buy back more of its common stock in 2024 compared with 2023. As of Mar 31, 2024, the company had approximately $20.7 billion worth of common stock remaining under the buyback plan.
Given its robust capital position and ample liquidity, the company’s capital-deployment activities seem sustainable and will boost investors’ confidence in the stock.
Expense Management: Wells Fargo’s prudent expense management initiatives support its financials. Since third-quarter 2020, the company has been actively engaged in cost-cutting measures, including the streamlining of its organizational structure, closure of branches and reduction in headcount. Non-interest expenses witnessed a negative CAGR of 1.1% over the last four years (ended 2023). The bank delivered gross expense savings aggregating $10 billion in 2021-2023. The company expects to continue with these efficiency initiatives this year, too.
Strong Balance Sheet: The company has a strong liquidity position, with a liquidity coverage ratio of 126% as of first-quarter 2024, which has been above its regulatory minimum of 100%. Its liquid assets (including cash and due from banks, as well as interest-earning deposits with banks) totaled $269.6 billion as of the same date. It also maintains long-term issuer investment-grade credit ratings of A+, A1 and BBB+ from Fitch, Moody’s and S&P Global, respectively. Given the solid credit profile and liquidity position, it will be able to meet its near-term debt obligations, even if the economic situation worsens.
Other Stocks to Consider
Some other top-ranked bank stocks worth mentioning are Northern Trust Corporation (NTRS - Free Report) and BankUnited, Inc. (BKU - Free Report) .
Northern Trust’s earnings estimates for 2024 have remained unchanged in the past seven days. The company’s shares have gained 3.6% in the past six months. At present, NTRS sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BankUnited’s 2024 earnings estimates have revised upward marginally in the past 30 days. The stock has gained 8.2% in the past three months. Currently, BKU carries a Zacks Rank #2 (Buy).