Is Wells Fargo & Company (WFC) Geared Up To Go Far?

4). Return on assets (ROA)- The ROA, which is calculated by multiplying net profit margin by asset turnover, tells us a good deal about how much value is being created from each dollar of assets. In this case, WFC’s ROA of 1.42% beats both its competitors and the industry average. Citi and BofA stand at 0.42% and 0.19%, while the industry’s average is 0.88%.

In a nutshell

It’s worth considering that Wells Fargo & Company (NYSE:WFC), which came out strong post-recession, still has a comparatively low exposure to the capital markets business. With improving asset quality and low cost funding, WFC seems to have substantial room for growth. While it may not be as attractively priced as its peers, the growth criteria do make it look promising from a long term perspective. As Warren Buffett says, “Tomorrow’s always uncertain, but the future, the longer future, is always very certain. And that’s what you have to keep your eye on.” And WFC doesn’t top the list of Buffett’s favorite banks for nothing.

The article Is Wells Fargo Geared Up To Go Far? originally appeared on Fool.com and is written by Zeeshan Siddique.

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