Are First International Bank of Israel (TLV:FIBI) earnings worth your attention?

For starters, it might seem like a good idea (and an exciting prospect) to buy a company that tells investors a good story, even if it currently lacks a track record of revenue and earnings. Unfortunately, these high-risk investments are often unlikely to ever return, and many investors pay a price to learn their lesson. A loss-making company has not yet proven itself with profits, and eventually the inflow of external capital may dry up.

So if this idea of ​​high risk and high reward doesn’t sit well with you, you might be more interested in profitable and growing businesses, like First International Bank of Israel (TLV: FIBI). This does not mean that the company presents the best investment opportunity, but profitability is a key element of business success.

Check opportunities and risks within the IL banking industry.

How fast is First International Bank of Israel growing earnings per share?

Typically, companies experiencing earnings per share (EPS) growth should see similar stock price trends. This means EPS growth is seen as a real benefit by most successful long-term investors. It is certainly nice to see that the First International Bank of Israel has managed to increase EPS by 20% per year over three years. Generally, we would say that if a company can follow this kind of growth, shareholders will be radiant.

Revenue growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and tax (EBIT) margin, it’s a great way for a business to maintain a competitive edge in the market. Not all of First International Bank of Israel’s income this year is income operations, so keep in mind that the revenue and margin figures used in this article may not be the best representation of the underlying business. First International Bank of Israel has maintained stable EBIT margins over the past year, while growing revenue by 9.3% to ₪4.7 billion. This is encouraging news for the company!

You can check the company’s revenue and profit growth trend in the table below. For more details, click on the image.

TASE: FIBI Earnings & Earnings History October 14, 2022

While it’s always good to see growing profits, you should always remember that a weak balance sheet could come back strong. So check the strength of the First International Bank of Israel’s balance sheet, before you get too excited.

Are First International Bank of Israel insiders aligned with all shareholders?

Before investing, it’s always a good idea to check that the management team is paid reasonably. Compensation levels close to or below the median can be a sign that the interests of shareholders are well taken into account. For companies with a market capitalization between ₪7.1 billion and ₪23 billion, such as First International Bank of Israel, the median CEO salary is around ₪5.5 million.

The CEO of First International Bank of Israel received €3.4 million in compensation for the year ending December 2021. That seems pretty reasonable, especially since it’s below the median for companies of similar size. CEO compensation isn’t the most important aspect of a company to consider, but when it’s reasonable, it gives a little more confidence that executives are looking after shareholders’ interests. It can also be a sign of a culture of integrity, broadly defined.

Is the First International Bank of Israel worth watching?

If you think stock price tracks earnings per share, you should definitely dive deeper into First International Bank of Israel’s strong EPS growth. The rapid growth bodes well while the CEO’s very reasonable salary aids build trust in the board. We believe that on its merits alone, this stock is worth watching going forward. It must be said that we discovered 1 warning sign for First International Bank of Israel which you should be aware of before investing here.

Although the First International Bank of Israel certainly looks good, it could attract more investors if insiders buy shares. If you like seeing insiders buy, then this free list of growing companies that insiders are buying might be exactly what you are looking for.

Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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