Stock Yards Bancorp (NASDAQ: SYBT) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Dividends

Stock Yards Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Western Alliance Bancorporation does not pay a dividend. Stock Yards Bancorp pays out 43.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

48.1% of Stock Yards Bancorp shares are owned by institutional investors. Comparatively, 81.2% of Western Alliance Bancorporation shares are owned by institutional investors. 6.2% of Stock Yards Bancorp shares are owned by insiders. Comparatively, 8.0% of Western Alliance Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Stock Yards Bancorp and Western Alliance Bancorporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stock Yards Bancorp $138.14 million 5.87 $41.92 million $1.85 19.35
Western Alliance Bancorporation $751.83 million 6.90 $288.53 million $2.77 17.98

Western Alliance Bancorporation has higher revenue and earnings than Stock Yards Bancorp. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Stock Yards Bancorp and Western Alliance Bancorporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stock Yards Bancorp 0 1 0 0 2.00
Western Alliance Bancorporation 0 0 5 0 3.00

Stock Yards Bancorp currently has a consensus target price of $38.00, indicating a potential upside of 6.15%. Western Alliance Bancorporation has a consensus target price of $58.20, indicating a potential upside of 16.87%. Given Western Alliance Bancorporation’s stronger consensus rating and higher probable upside, analysts clearly believe Western Alliance Bancorporation is more favorable than Stock Yards Bancorp.

Profitability

This table compares Stock Yards Bancorp and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stock Yards Bancorp 28.11% 13.36% 1.40%
Western Alliance Bancorporation 35.67% 15.23% 1.66%

Volatility and Risk

Stock Yards Bancorp has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Summary

Western Alliance Bancorporation beats Stock Yards Bancorp on 14 of the 16 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. is the holding company for Stock Yards Bank & Trust Company (the Bank). The Bank is a state chartered bank. The Company operates through two segments: commercial banking, and wealth management and trust. The commercial banking segment provides a full range of loan and deposit products to individual consumers and businesses, plus origination of consumer mortgages and securities brokerage activity. The wealth management and trust segment provides investment management, trust and estate administration, and retirement plan services. The Bank provides commercial and personal banking services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets through 37 full service banking offices, as of December 31, 2016. The Bank also originates and sells single-family residential mortgages. Additionally, the Bank offers securities brokerage services via its branch network through an arrangement with a third party broker-dealer.

About Western Alliance Bancorporation

Western Alliance Bancorporation is a bank holding company. The Company provides a range of deposit, lending, treasury management, international banking and online banking products and services through its banking subsidiary, Western Alliance Bank (WAB or the Bank). The Company’s regional segments include Arizona, Nevada, Southern California and Northern California, which provide banking and related services to their respective markets. The operations from the regional segments correspond to the banking divisions, which include Alliance Bank of Arizona (ABA) in Arizona, Bank of Nevada (BON) and First Independent Bank (FIB) in Nevada, Torrey Pines Bank (TPB) in Southern California, and Bridge Bank in Northern California. The Company’s National Business Lines (NBL) segments include HOA Services, Hotel Franchise Finance (HFF), Public & Nonprofit Finance, Technology & Innovation, Other NBLs, which provide specialized banking services to niche markets.

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