Washington Trust Bancorp (NASDAQ: WASH) and Sterling Bancorp (NYSE:PBNY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Dividends

Washington Trust Bancorp pays an annual dividend of $1.56 per share and has a dividend yield of 2.7%. Sterling Bancorp does not pay a dividend. Washington Trust Bancorp pays out 54.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Washington Trust Bancorp and Sterling Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Washington Trust Bancorp $174.06 million 5.69 $49.22 million $2.86 20.12
Sterling Bancorp N/A N/A N/A N/A N/A

Washington Trust Bancorp has higher revenue and earnings than Sterling Bancorp.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Washington Trust Bancorp and Sterling Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Trust Bancorp 0 1 1 0 2.50
Sterling Bancorp 0 0 0 0 N/A

Washington Trust Bancorp presently has a consensus price target of $50.50, suggesting a potential downside of 12.25%. Given Washington Trust Bancorp’s higher possible upside, research analysts clearly believe Washington Trust Bancorp is more favorable than Sterling Bancorp.

Institutional and Insider Ownership

55.3% of Washington Trust Bancorp shares are held by institutional investors. 2.6% of Washington Trust Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Washington Trust Bancorp and Sterling Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Trust Bancorp 23.86% 12.43% 1.14%
Sterling Bancorp 33.42% 8.90% 1.13%

Summary

Washington Trust Bancorp beats Sterling Bancorp on 8 of the 10 factors compared between the two stocks.

Washington Trust Bancorp Company Profile

Washington Trust Bancorp, Inc. is a bank holding company and financial holding company. The Company is a holding company of The Washington Trust Company, of Westerly (the Bank), a Rhode Island chartered commercial bank. The Company operates through two business segments: Commercial Banking and Wealth Management Services. The Company offers a range of product lines of banking and financial services to individuals and businesses, including commercial, residential and consumer lending, retail and commercial deposit products, and wealth management services through its offices in Rhode Island, eastern Massachusetts and Connecticut; its automated teller machines (ATMs); telephone banking; mobile banking and its Internet Website (www.washtrust.com). Its investment securities portfolio amounted to $755.5 million, as of December 31, 2016. The Company’s total loan portfolio amounted to $3.2 billion, as of December 31, 2016.

Sterling Bancorp Company Profile

Sterling Bancorp is a financial holding company. The Company is a bank holding company that owns the Sterling National Bank (the Bank). The Bank specializes in the delivery of services and solutions to business owners, their families and consumers within the communities it serves. The Bank offers a line of commercial, business, and consumer banking products and services. The Bank is engaged in the origination of commercial loans and commercial mortgage loans. The Company also originates residential mortgage loans and consumer loans. The Bank offers services in the New York Metro Market, which includes Manhattan and Long Island, and the New York Suburban Market, which consists of Rockland, Orange, Sullivan, Ulster, Putnam and Westchester counties in New York and Bergen County in New Jersey. Its deposit products include non-interest bearing demand deposits, interest bearing demand deposits, savings, money market and certificate of deposits.

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