WesBanco (NASDAQ:WSBC – Get Free Report) and Washington Federal (NASDAQ:WAFD – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Insider & Institutional Ownership
58.0% of WesBanco shares are held by institutional investors. Comparatively, 86.6% of Washington Federal shares are held by institutional investors. 3.1% of WesBanco shares are held by company insiders. Comparatively, 1.5% of Washington Federal shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
WesBanco has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Washington Federal has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WesBanco | 0 | 5 | 0 | 0 | 2.00 |
| Washington Federal | 0 | 1 | 2 | 0 | 2.67 |
WesBanco presently has a consensus price target of $32.17, suggesting a potential upside of 28.56%. Washington Federal has a consensus price target of $34.00, suggesting a potential upside of 27.63%. Given WesBanco’s higher probable upside, analysts plainly believe WesBanco is more favorable than Washington Federal.
Profitability
This table compares WesBanco and Washington Federal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| WesBanco | 26.04% | 8.49% | 1.14% |
| Washington Federal | 27.74% | 13.74% | 1.29% |
Dividends
WesBanco pays an annual dividend of $1.40 per share and has a dividend yield of 5.6%. Washington Federal pays an annual dividend of $1.00 per share and has a dividend yield of 3.8%. WesBanco pays out 45.6% of its earnings in the form of a dividend. Washington Federal pays out 24.6% 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. WesBanco has increased its dividend for 12 consecutive years and Washington Federal has increased its dividend for 13 consecutive years.
Valuation and Earnings
This table compares WesBanco and Washington Federal’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| WesBanco | $631.05 million | 2.35 | $192.11 million | $3.07 | 8.15 |
| Washington Federal | $732.73 million | 2.35 | $236.33 million | $4.07 | 6.55 |
Washington Federal has higher revenue and earnings than WesBanco. Washington Federal is trading at a lower price-to-earnings ratio than WesBanco, indicating that it is currently the more affordable of the two stocks.
Summary
Washington Federal beats WesBanco on 12 of the 17 factors compared between the two stocks.
About WesBanco
WesBanco, Inc. operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, and mortgage banking and insurance services. The company operates in two segments, Community Banking, and Trust and Investment Services. It offers commercial demand, individual demand, and time deposit accounts; commercial, mortgage and individual installment loans; retail loans, such as residential real estate mortgage loans, home equity lines of credit, and loans for other consumer purposes; installment loans to finance the purchase of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and various non-traditional offerings, such as insurance and securities brokerage services. The company also provides trust services; and various alternative investment products, including mutual funds and annuities. Further, it acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. The company was founded in 1870 and is headquartered in Wheeling, West Virginia.
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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