Intrinsic value of Webster Financial - WBS

Previous Close

$66.96

  Intrinsic Value

$0.77

stock screener

  Rating & Target

str. sell

-99%

Previous close

$66.96

 
Intrinsic value

$0.77

 
Up/down potential

-99%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as WBS.

We calculate the intrinsic value of WBS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -100.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  0
  1,111
  1,212
  1,317
  1,426
  1,539
  1,657
  1,780
  1,907
  2,039
  2,177
  2,320
  2,468
  2,623
  2,784
  2,952
  3,127
  3,310
  3,500
  3,699
  3,906
  4,123
  4,349
  4,586
  4,833
  5,092
  5,363
  5,647
  5,944
  6,255
  6,582
Variable operating expenses, $m
 
  478
  521
  566
  613
  662
  713
  765
  820
  877
  936
  997
  1,061
  1,128
  1,197
  1,269
  1,345
  1,423
  1,505
  1,590
  1,680
  1,773
  1,870
  1,972
  2,078
  2,190
  2,306
  2,428
  2,556
  2,690
  2,830
Fixed operating expenses, $m
 
  235
  240
  246
  251
  256
  262
  268
  274
  280
  286
  292
  299
  305
  312
  319
  326
  333
  340
  348
  355
  363
  371
  379
  388
  396
  405
  414
  423
  432
  442
Total operating expenses, $m
  0
  713
  761
  812
  864
  918
  975
  1,033
  1,094
  1,157
  1,222
  1,289
  1,360
  1,433
  1,509
  1,588
  1,671
  1,756
  1,845
  1,938
  2,035
  2,136
  2,241
  2,351
  2,466
  2,586
  2,711
  2,842
  2,979
  3,122
  3,272
Operating income, $m
  0
  398
  451
  505
  562
  621
  682
  747
  813
  883
  955
  1,030
  1,108
  1,190
  1,275
  1,364
  1,457
  1,553
  1,655
  1,760
  1,871
  1,987
  2,108
  2,234
  2,367
  2,506
  2,652
  2,805
  2,965
  3,133
  3,310
EBITDA, $m
  36
  3,276
  3,589
  3,915
  4,254
  4,607
  4,973
  5,355
  5,751
  6,163
  6,591
  7,037
  7,500
  7,983
  8,485
  9,009
  9,554
  10,124
  10,718
  11,338
  11,985
  12,662
  13,369
  14,109
  14,883
  15,693
  16,541
  17,428
  18,358
  19,332
  20,353
Interest expense (income), $m
  102
  1,363
  1,350
  1,452
  1,558
  1,668
  1,783
  1,902
  2,026
  2,155
  2,289
  2,428
  2,573
  2,724
  2,881
  3,044
  3,214
  3,391
  3,576
  3,768
  3,969
  4,179
  4,399
  4,628
  4,868
  5,118
  5,381
  5,655
  5,942
  6,243
  6,558
Earnings before tax, $m
  303
  -965
  -899
  -947
  -996
  -1,047
  -1,101
  -1,156
  -1,213
  -1,273
  -1,334
  -1,398
  -1,465
  -1,534
  -1,605
  -1,680
  -1,757
  -1,837
  -1,921
  -2,008
  -2,098
  -2,193
  -2,291
  -2,394
  -2,500
  -2,612
  -2,728
  -2,850
  -2,977
  -3,110
  -3,249
Tax expense, $m
  96
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  207
  -965
  -899
  -947
  -996
  -1,047
  -1,101
  -1,156
  -1,213
  -1,273
  -1,334
  -1,398
  -1,465
  -1,534
  -1,605
  -1,680
  -1,757
  -1,837
  -1,921
  -2,008
  -2,098
  -2,193
  -2,291
  -2,394
  -2,500
  -2,612
  -2,728
  -2,850
  -2,977
  -3,110
  -3,249

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  26,073
  23,155
  25,250
  27,433
  29,705
  32,067
  34,522
  37,074
  39,726
  42,482
  45,346
  48,325
  51,424
  54,648
  58,006
  61,503
  65,148
  68,949
  72,914
  77,052
  81,373
  85,887
  90,604
  95,536
  100,694
  106,090
  111,737
  117,649
  123,839
  130,323
  137,115
Adjusted assets (=assets-cash), $m
  26,073
  23,155
  25,250
  27,433
  29,705
  32,067
  34,522
  37,074
  39,726
  42,482
  45,346
  48,325
  51,424
  54,648
  58,006
  61,503
  65,148
  68,949
  72,914
  77,052
  81,373
  85,887
  90,604
  95,536
  100,694
  106,090
  111,737
  117,649
  123,839
  130,323
  137,115
Revenue / Adjusted assets
  0.000
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
Average production assets, $m
  171
  28,780
  31,385
  34,098
  36,922
  39,858
  42,910
  46,082
  49,377
  52,803
  56,364
  60,066
  63,918
  67,926
  72,099
  76,446
  80,977
  85,701
  90,629
  95,773
  101,144
  106,754
  112,617
  118,747
  125,158
  131,866
  138,885
  146,233
  153,927
  161,986
  170,429
Working capital, $m
  0
  -25,427
  -27,728
  -30,125
  -32,620
  -35,214
  -37,910
  -40,713
  -43,625
  -46,651
  -49,797
  -53,068
  -56,471
  -60,012
  -63,699
  -67,540
  -71,542
  -75,716
  -80,070
  -84,614
  -89,359
  -94,316
  -99,497
  -104,912
  -110,576
  -116,502
  -122,703
  -129,195
  -135,993
  -143,113
  -150,572
Total debt, $m
  1,175
  24,999
  26,885
  28,850
  30,894
  33,020
  35,230
  37,526
  39,913
  42,393
  44,971
  47,652
  50,441
  53,343
  56,365
  59,513
  62,793
  66,214
  69,782
  73,507
  77,396
  81,458
  85,704
  90,142
  94,784
  99,641
  104,723
  110,044
  115,615
  121,450
  127,563
Total liabilities, $m
  23,546
  20,839
  22,725
  24,690
  26,734
  28,860
  31,070
  33,367
  35,753
  38,233
  40,812
  43,493
  46,281
  49,184
  52,205
  55,353
  58,634
  62,054
  65,623
  69,347
  73,236
  77,298
  81,544
  85,982
  90,624
  95,481
  100,563
  105,884
  111,455
  117,291
  123,404
Total equity, $m
  2,527
  2,315
  2,525
  2,743
  2,970
  3,207
  3,452
  3,707
  3,973
  4,248
  4,535
  4,833
  5,142
  5,465
  5,801
  6,150
  6,515
  6,895
  7,291
  7,705
  8,137
  8,589
  9,060
  9,554
  10,069
  10,609
  11,174
  11,765
  12,384
  13,032
  13,712
Total liabilities and equity, $m
  26,073
  23,154
  25,250
  27,433
  29,704
  32,067
  34,522
  37,074
  39,726
  42,481
  45,347
  48,326
  51,423
  54,649
  58,006
  61,503
  65,149
  68,949
  72,914
  77,052
  81,373
  85,887
  90,604
  95,536
  100,693
  106,090
  111,737
  117,649
  123,839
  130,323
  137,116
Debt-to-equity ratio
  0.465
  10.800
  10.650
  10.520
  10.400
  10.300
  10.200
  10.120
  10.050
  9.980
  9.920
  9.860
  9.810
  9.760
  9.720
  9.680
  9.640
  9.600
  9.570
  9.540
  9.510
  9.480
  9.460
  9.440
  9.410
  9.390
  9.370
  9.350
  9.340
  9.320
  9.300
Adjusted equity ratio
  0.097
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  207
  -965
  -899
  -947
  -996
  -1,047
  -1,101
  -1,156
  -1,213
  -1,273
  -1,334
  -1,398
  -1,465
  -1,534
  -1,605
  -1,680
  -1,757
  -1,837
  -1,921
  -2,008
  -2,098
  -2,193
  -2,291
  -2,394
  -2,500
  -2,612
  -2,728
  -2,850
  -2,977
  -3,110
  -3,249
Depreciation, amort., depletion, $m
  36
  2,878
  3,138
  3,410
  3,692
  3,986
  4,291
  4,608
  4,938
  5,280
  5,636
  6,007
  6,392
  6,793
  7,210
  7,645
  8,098
  8,570
  9,063
  9,577
  10,114
  10,675
  11,262
  11,875
  12,516
  13,187
  13,888
  14,623
  15,393
  16,199
  17,043
Funds from operations, $m
  453
  1,913
  2,239
  2,463
  2,696
  2,938
  3,190
  3,452
  3,724
  4,008
  4,302
  4,608
  4,927
  5,259
  5,604
  5,965
  6,341
  6,733
  7,142
  7,569
  8,016
  8,483
  8,971
  9,481
  10,015
  10,575
  11,160
  11,773
  12,416
  13,089
  13,794
Change in working capital, $m
  55
  -2,206
  -2,301
  -2,397
  -2,495
  -2,594
  -2,696
  -2,802
  -2,912
  -3,026
  -3,146
  -3,271
  -3,403
  -3,541
  -3,687
  -3,841
  -4,003
  -4,174
  -4,354
  -4,544
  -4,745
  -4,957
  -5,180
  -5,416
  -5,664
  -5,926
  -6,201
  -6,492
  -6,798
  -7,120
  -7,459
Cash from operations, $m
  398
  4,119
  4,540
  4,860
  5,191
  5,533
  5,887
  6,254
  6,636
  7,034
  7,448
  7,879
  8,330
  8,800
  9,292
  9,806
  10,343
  10,906
  11,496
  12,114
  12,761
  13,440
  14,151
  14,897
  15,679
  16,500
  17,361
  18,265
  19,213
  20,209
  21,253
Maintenance CAPEX, $m
  0
  -2,628
  -2,878
  -3,138
  -3,410
  -3,692
  -3,986
  -4,291
  -4,608
  -4,938
  -5,280
  -5,636
  -6,007
  -6,392
  -6,793
  -7,210
  -7,645
  -8,098
  -8,570
  -9,063
  -9,577
  -10,114
  -10,675
  -11,262
  -11,875
  -12,516
  -13,187
  -13,888
  -14,623
  -15,393
  -16,199
New CAPEX, $m
  -41
  -2,500
  -2,605
  -2,713
  -2,824
  -2,936
  -3,052
  -3,172
  -3,296
  -3,425
  -3,561
  -3,703
  -3,852
  -4,008
  -4,173
  -4,347
  -4,531
  -4,724
  -4,928
  -5,144
  -5,371
  -5,611
  -5,863
  -6,130
  -6,411
  -6,707
  -7,019
  -7,348
  -7,694
  -8,059
  -8,443
Cash from investing activities, $m
  -1,635
  -5,128
  -5,483
  -5,851
  -6,234
  -6,628
  -7,038
  -7,463
  -7,904
  -8,363
  -8,841
  -9,339
  -9,859
  -10,400
  -10,966
  -11,557
  -12,176
  -12,822
  -13,498
  -14,207
  -14,948
  -15,725
  -16,538
  -17,392
  -18,286
  -19,223
  -20,206
  -21,236
  -22,317
  -23,452
  -24,642
Free cash flow, $m
  -1,237
  -1,009
  -942
  -992
  -1,043
  -1,096
  -1,151
  -1,208
  -1,268
  -1,329
  -1,393
  -1,460
  -1,528
  -1,600
  -1,674
  -1,752
  -1,832
  -1,915
  -2,002
  -2,093
  -2,187
  -2,285
  -2,388
  -2,495
  -2,606
  -2,723
  -2,844
  -2,971
  -3,104
  -3,243
  -3,388
Issuance/(repayment) of debt, $m
  5
  -246
  1,886
  1,965
  2,044
  2,126
  2,210
  2,297
  2,386
  2,480
  2,578
  2,681
  2,789
  2,902
  3,022
  3,148
  3,281
  3,421
  3,568
  3,724
  3,889
  4,062
  4,246
  4,439
  4,642
  4,857
  5,083
  5,321
  5,571
  5,835
  6,113
Issuance/(repurchase) of shares, $m
  -11
  3,372
  1,109
  1,165
  1,223
  1,284
  1,346
  1,411
  1,478
  1,548
  1,621
  1,696
  1,775
  1,856
  1,941
  2,030
  2,122
  2,217
  2,317
  2,422
  2,531
  2,644
  2,763
  2,887
  3,016
  3,152
  3,293
  3,441
  3,596
  3,758
  3,928
Cash from financing (excl. dividends), $m  
  1,326
  3,126
  2,995
  3,130
  3,267
  3,410
  3,556
  3,708
  3,864
  4,028
  4,199
  4,377
  4,564
  4,758
  4,963
  5,178
  5,403
  5,638
  5,885
  6,146
  6,420
  6,706
  7,009
  7,326
  7,658
  8,009
  8,376
  8,762
  9,167
  9,593
  10,041
Total cash flow (excl. dividends), $m
  89
  2,116
  2,052
  2,138
  2,225
  2,314
  2,405
  2,499
  2,597
  2,699
  2,806
  2,918
  3,035
  3,159
  3,289
  3,426
  3,570
  3,723
  3,884
  4,053
  4,232
  4,421
  4,620
  4,831
  5,052
  5,285
  5,531
  5,790
  6,063
  6,351
  6,653
Retained Cash Flow (-), $m
  -113
  -3,372
  -1,109
  -1,165
  -1,223
  -1,284
  -1,346
  -1,411
  -1,478
  -1,548
  -1,621
  -1,696
  -1,775
  -1,856
  -1,941
  -2,030
  -2,122
  -2,217
  -2,317
  -2,422
  -2,531
  -2,644
  -2,763
  -2,887
  -3,016
  -3,152
  -3,293
  -3,441
  -3,596
  -3,758
  -3,928
Prev. year cash balance distribution, $m
 
  92
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  12
  13
  15
  16
  17
  18
  20
  21
  23
  24
  26
  28
  30
  31
  33
  35
  38
  40
  42
  44
  47
  49
  52
  55
  58
  61
  64
  68
  71
  75
Cash available for distribution, $m
 
  -1,164
  944
  973
  1,002
  1,030
  1,059
  1,088
  1,119
  1,151
  1,185
  1,221
  1,260
  1,302
  1,347
  1,396
  1,449
  1,505
  1,566
  1,632
  1,702
  1,777
  1,858
  1,944
  2,036
  2,134
  2,238
  2,349
  2,467
  2,592
  2,725
Discount rate, %
 
  15.40
  16.17
  16.98
  17.83
  18.72
  19.65
  20.64
  21.67
  22.75
  23.89
  25.08
  26.34
  27.66
  29.04
  30.49
  32.02
  33.62
  35.30
  37.06
  38.92
  40.86
  42.90
  45.05
  47.30
  49.67
  52.15
  54.76
  57.50
  60.37
  63.39
PV of cash for distribution, $m
 
  -1,008
  699
  608
  520
  437
  361
  293
  233
  182
  139
  104
  76
  54
  38
  26
  17
  11
  7
  4
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  33.8
  23.1
  16.0
  11.2
  7.9
  5.6
  4.0
  2.9
  2.1
  1.5
  1.1
  0.8
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Webster Financial Corporation is a bank and financial holding company. The Company's segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.

FINANCIAL RATIOS  of  Webster Financial (WBS)

Valuation Ratios
P/E Ratio 29.7
Price to Sales 0
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 15.4
Price to Free Cash Flow 17.2
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.9%
Cap. Spend. - 3 Yr. Gr. Rate 13.3%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 46.5%
Total Debt to Equity 46.5%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital 5.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 8.4%
Return On Equity - 3 Yr. Avg. 8.6%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 31.7%
Eff/ Tax Rate - 3 Yr. Avg. 31.5%
Payout Ratio 47.3%

WBS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WBS stock intrinsic value calculation we used $1015 million for the last fiscal year's total revenue generated by Webster Financial. The default revenue input number comes from 2016 income statement of Webster Financial. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WBS stock valuation model: a) initial revenue growth rate of 9.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 15.4%, whose default value for WBS is calculated based on our internal credit rating of Webster Financial, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Webster Financial.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WBS stock the variable cost ratio is equal to 43%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $230 million in the base year in the intrinsic value calculation for WBS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Webster Financial.

Corporate tax rate of 27% is the nominal tax rate for Webster Financial. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WBS stock is equal to 1.2%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WBS are equal to 2589.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Webster Financial operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WBS is equal to -2287.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for Webster Financial - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 92 million for Webster Financial is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Webster Financial at the current share price and the inputted number of shares is $6.2 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Webster Financial: 2Q Earnings Snapshot   [Jul-19-18 08:17AM  Associated Press]
▶ Webster Raises Prime Lending Rate to 5.00 Percent   [Jun-13-18 05:39PM  PR Newswire]
▶ Trump to announce ways to lower prescription drug costs   [May-11-18 10:13AM  Yahoo Finance Video]
▶ Santander gets good news on regulatory, customer service marks   [May-01-18 02:56PM  American City Business Journals]
▶ Webster Financial Corporation Increases Common Dividend   [Apr-23-18 05:34PM  PR Newswire]
▶ Company News For Apr 20, 2018   [Apr-20-18 10:02AM  Zacks]
▶ Webster Financial: 1Q Earnings Snapshot   [Apr-19-18 07:51AM  Associated Press]
▶ Webster Raises Prime Lending Rate to 4.75 Percent   [Mar-21-18 05:59PM  PR Newswire]
▶ Webster Sets Date for Annual Shareholders Meeting   [Feb-14-18 04:30PM  PR Newswire]
▶ Webster Financial Corporation Declares Common Dividend   [Jan-30-18 04:42PM  PR Newswire]
▶ Webster Financial beats Street 4Q forecasts   [11:14AM  Associated Press]
▶ Webster Raises Prime Lending Rate to 4.50 Percent   [Dec-13-17 06:00PM  PR Newswire]
▶ Webster Financial Earns RS Rating Upgrade   [Nov-30-17 03:00AM  Investor's Business Daily]
▶ Two Webster Board Members Honored   [Nov-16-17 01:12PM  PR Newswire]
▶ Webster Financial Corporation Declares Common Dividend   [Oct-24-17 04:15PM  PR Newswire]
▶ Webster Financial beats 3Q profit forecasts   [Oct-19-17 07:39AM  Associated Press]
▶ Webster Financial Corporation Announces CEO Succession   [Sep-19-17 07:30AM  PR Newswire]
▶ Webster Announces New Chief Accounting Officer   [Sep-18-17 03:39PM  PR Newswire]
▶ Webster Bank to Make Presentation at Investor Conference   [Sep-06-17 11:45AM  PR Newswire]
▶ Webster Financial Corporation Declares Common Dividend   [Jul-24-17 07:20PM  PR Newswire]
▶ Webster Financial beats Street 2Q forecasts   [Jul-21-17 08:55PM  Associated Press]
▶ Webster Investor Day 2017 in New York City   [Jul-19-17 04:30PM  PR Newswire]
▶ [$$] Three Mid-Cap Banks Set to Outperform   [Jun-29-17 02:46PM  Barrons.com]
Financial statements of WBS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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