Daily Stock Analysis: Northwest Bancshares (NWBI)

Northwest Bancshares Inc, known by the ticker symbol NWBI, is a small cap Pennsylvania regional bank in the financial services business sector. This is my first report on NWBI for my Viital stock portfolio. I have not reviewed NWBI since May 5 when I considered it the third time for a slot in my Vista portfolio (the sixth of seven collected so-far).

Northwest Bancshares Inc. is a stockholding company for Northwest Bank, which is a stock savings bank and community-oriented financial institution offering personal and banking business solutions, investment management, trust services and insurance products. 

man writing on paper

Photo by Scott Graham on Unsplash

It also offers consumer finance loans through a wholly owned subsidiary. The bank's loan portfolio segment consists of personal banking and business banking loans. Personal banking includes residential mortgages, home equity loans, and other consumer loans. 

Business banking loans consist of commercial real estate loans and commercial loans. Net interest income is the company's primary contributor to revenue.

The company also offers investment management and trust services. 

As of June 30, 2021, it operated 162 full-service community banking offices and 8 free standing drive-through facilities in Pennsylvania, New York, Ohio, and Indiana. 

The company was founded in 1896 and is headquartered in Warren, Pennsylvania.

Three key data points gauge any dividend equity or fund such as Northwest Bancshares Inc (NWBI):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

NWBI Price

Northwest's price per share was $13.86 as of yesterday's market close. One year ago its price was $12.56 Thus, Northwest's share price rose over 10% in the past year.

If Northwest's stock trades in the range of $12.00 to $18.00 this next year, its recent $23.86 share price might rise by $2.64 to reach $16.50 by December 23, 2022. My estimate is $0.04 lower than the historic multiple calculated by Y Charts.

NWBI Dividends

Northwest's most recent quarterly dividend of  $0.20  was paid out November 15th, to shareholders of record November 4th. That dividend and those to come are estimated equal to $0.80 annually and yield 5.77% per yesterday's $13.86 closing price. 

Northwest Bancshares Inc (NWBI) has paid quarterly dividends increasing annually since February 15,1995. That will be 27 years come February.

NWBI Returns

Adding the $0.80 annual estimated Northwest Bancshares Inc forward-looking dividend to my $2.64 price upside estimate shows a $3.44 potential gross gain, per share, to be reduced by any costs to trade NWBI shares.  

At yesterday's $13.86 price per share, a little over $1000 would buy 72 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.14 per share.

Subtract that maybe $0.14 brokerage cost from my estimated $3.44 gross gain per share results in a net gain of $3.30 X 72 shares = $237.60 for a 23.75% net gain on a $997.92  investment.

So it is that Northwest Bancshares Inc (NWBI)  shows a possible 23.75% net gain including a 5.77% forward estimated dividend yield. 

Over the next year at this time a $1000 investment in Northwest Bancshares Inc (NWBI) could generate $57.70 in cash dividends alone. Note that a single share of NWBI stock bought at yesterday's closing price was $13.86. Therefore, NWBI  share price is more than four times under the dividend income from $1000.00 invested. Thus, according to my dogcatcher ideal, now is a prime time to pick up Northwest Bancshares Inc (NWBI) shares. The estimated next-year dividend from $1K invested is  4.16 times Northwest's single share price. Consider yourself alerted. Its a sign!  

All of the estimates above are speculation based on the past history of Northwest Bancshares Inc (NWBI). Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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