Financial Institutions (NASDAQ:FISI – Get Rating) and Washington Federal (NASDAQ:WAFD – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Profitability
This table compares Financial Institutions and Washington Federal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Financial Institutions | 20.38% | 13.60% | 0.94% |
| Washington Federal | 31.00% | 14.12% | 1.33% |
Volatility & Risk
Financial Institutions has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Washington Federal has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.
Institutional and Insider Ownership
Dividends
Financial Institutions pays an annual dividend of $1.20 per share and has a dividend yield of 7.3%. Washington Federal pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Financial Institutions pays out 35.4% of its earnings in the form of a dividend. Washington Federal pays out 24.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Financial Institutions has increased its dividend for 13 consecutive years and Washington Federal has increased its dividend for 13 consecutive years.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Financial Institutions and Washington Federal, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Financial Institutions | 0 | 1 | 0 | 0 | 2.00 |
| Washington Federal | 0 | 1 | 2 | 0 | 2.67 |
Financial Institutions currently has a consensus price target of $29.00, suggesting a potential upside of 75.86%. Washington Federal has a consensus price target of $34.00, suggesting a potential upside of 17.93%. Given Financial Institutions’ higher probable upside, analysts plainly believe Financial Institutions is more favorable than Washington Federal.
Earnings and Valuation
This table compares Financial Institutions and Washington Federal’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Financial Institutions | $242.38 million | 1.05 | $56.57 million | $3.39 | 4.86 |
| Washington Federal | $732.73 million | 2.59 | $236.33 million | $4.09 | 7.05 |
Washington Federal has higher revenue and earnings than Financial Institutions. Financial Institutions is trading at a lower price-to-earnings ratio than Washington Federal, indicating that it is currently the more affordable of the two stocks.
Summary
Washington Federal beats Financial Institutions on 12 of the 16 factors compared between the two stocks.
About Financial Institutions
Financial Institutions, Inc. is a holding company, which engages in the provision of financial services. It operates through the following segments: Banking, Non-Banking, and Holding Company and Other. The Banking segment includes retail and commercial banking operations. The Non-Banking segment consists of the activities of SDN, a full-service insurance agency that offers insurance services to both personal and business clients, and Courier Capital, an investment advisor and wealth management firm that delivers customized investment management, investment consulting, and retirement plan services to individuals, businesses, institutions, foundations, and retirement plans. The company was founded in 1931 and is headquartered in Warsaw, NY.
About Washington Federal
Washington Federal, Inc. operates as the bank holding company for Washington Federal Bank, National Association that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family residential, construction, land acquisition and development, consumer lot, multi-family residential, commercial and industrial, commercial real estate, home equity, business and consumer loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; mobile and internet banking services; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. Washington Federal, Inc. was founded in 1917 and is headquartered in Seattle, Washington.
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