Here is why National Bankshares (USA Stocks:NKSH) can still attract traders
 | By Rifka Kats | Macroaxis Story |
National Bankshares, a domestic regional bank with a market capitalization of $170.9M, has been under the financial microscope to determine if its stock is fairly priced. With a net income applicable to common shares of $25.9M and earnings per share (EPS) of 4.29, the bank's performance seems robust. However, a closer look at the bank's financials reveals a quarterly earnings growth of -0.048, which may raise concerns among potential investors. The bank's return on equity stands at 0.175, and it has a book value of 22.25. The diluted EPS is 4.29, indicating a healthy profit margin of 0.4312. The bank's operating margin is 0.5414, and it has a PE ratio of 6.7646, which is relatively low compared to other banks in the same category. Analysts have a consensus "Buy" rating on the stock, with an estimated target price of $34.75. The highest estimated target price stands at $35.5, and the lowest at $34. The bank's current valuation market value is 29.02, which is lower than its real value of 32.12, suggesting that the stock may be undervalued. The bank's dividend yield is 0.0504, with a dividend per share of 1.5, which may be attractive to income-focused investors. However, the negative quarterly earnings growth may be a concern for growth-focused investors. In conclusion, while National Bankshares has strong financials and a positive analyst consensus, its negative quarterly earnings growth may be a potential red flag. Therefore, investors should carefully consider these factors before deciding whether the stock is fairly priced. The calculated tax rate for National Bankshares has been observed to decrease compared to previous years. The value of the calculated tax rate last year was reported at 18.36. It is estimated that the current Cash and Equivalents Turnover will increase to 0.65, while Average Assets are projected to decrease to less than 1.6 billion.
In today's trading environment, many traders prioritize capital preservation over market returns. However, National Bankshares could be an exception to this trend. We will assess whether the shares of National Bankshares are reasonably priced as we enter August.
In this article, I will also discuss various factors influencing National Bankshares' products and services, and explain how these could impact traders of National Bankshares.
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Reviewed by Vlad Skutelnik
Our advisory module supplements the existing analysts and expert consensus on National Bankshares. It evaluates the company's potential for growth using all available fundamental, technical, and market-related data at the time.
Rigorous look on National
National Bankshares (NASDAQ: NKSH) is a regional bank in the financial services sector with a solid earnings per share (EPS) estimate of $2.79 for the next year and $0.73 for the next quarter. Despite a quarterly earnings growth decline of 4.8%, the bank's net income from continuing operations stands at a robust $25.9 million, with an income before tax of $31.8 million. The bank's stock is currently trading at $29.02, with a low and high price of $28.9 and $29.26 respectively, and a potential upside of 4.67%. Given the bank's positive return on assets of 1.51% and a dividend yield of 5.04%, the market's perception of National Bankshares stock appears to be fairly priced. The performance of National Bankshares in the marketplace will significantly impact your decision to invest in its stock. Revenue growth, profitability, competitive positioning, management quality, and industry trends can influence National Bankshares' stock prices. When investing in National Bankshares, there are several factors to consider and potential outcomes to expect. As a company performs well, its stock price may increase, allowing investors to benefit from price appreciation. However, National Stock can experience significant price fluctuations due to market conditions, economic factors, industry trends, or company-specific news. This is why investing in stocks such as National Bankshares carries risks, including the potential for capital loss. Stock prices can decline, and investors may incur losses if they sell shares at a lower price than their initial investment.
And What about dividends?
A dividend is the distribution of a portion of National Bankshares earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. National Bankshares dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. National one year expected dividend income is about USD1.34 per share.
Investing in stocks that pay dividends, such as stock of National Bankshares, is one of many strategies that are good for long-term investments. Ex-dividend dates are significant because investors in National Bankshares must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for National Bankshares. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.How important is National Bankshares's Liquidity
National Bankshares financial leverage refers to using borrowed capital as a funding source to finance National Bankshares ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. National Bankshares financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to National Bankshares' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of National Bankshares' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between National Bankshares's total debt and its cash.
Another Deeper Perspective
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. National Bankshares has an asset utilization ratio of 3.54 percent. This signifies that the company is making $0.0354 for each dollar of assets. An increasing asset utilization means that National Bankshares is more efficient with each dollar of assets it utilizes for everyday operations. National Bankshares, a key player in the Banks-Regional industry, is currently trading on NASDAQ under the code NKSH. The company, with a total asset base of $1.68B, has a steady return on assets at 0.0151, indicating its effectiveness in using its assets to generate earnings. It is worth noting that the company's earnings per share (EPS) estimate for the current year stands at 2.94X. The EPS estimate for the next quarter is also promising at 0.73, which should reassure investors about the company's profitability. The bank has a healthy net interest income of $47M, which is a key indicator of its core financial health.Additionally, the company's operating income stands at $34.8M, while the EBITDA is at $35.45M. These strong financials are reflected in the company's PE ratio of 6.76, which is lower than the industry average, indicating that the stock may be undervalued. Despite its robust financial health, National Bankshares has a relatively low Wall Street target price of $34.75, with a potential upside of 4.67. However, it's worth noting that the company has a healthy dividend yield of 0.0504, which adds to its investment appeal. Moreover, the bank's stock is not highly volatile, as indicated by its beta of 0.42 and standard deviation of 2.56. This low volatility, combined with the bank's strong financials, suggests that National Bankshares' stock may be a stable investment option. However, investors should also consider the company's Value At Risk of -4.54 and a probability of bankruptcy at 1.00% in their risk assessment. With a Price to Book ratio of 2.09X, the question remains: Is National Bankshares Stock fairly priced? The market's perception seems to suggest so. However, investors would do well to consider their personal risk tolerance and investment goals before diving in. .
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