Walker & Dunlop (NYSE: WD) and First Bank (NASDAQ:FRBA) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Insider & Institutional Ownership

77.3% of Walker & Dunlop shares are held by institutional investors. Comparatively, 43.3% of First Bank shares are held by institutional investors. 11.7% of Walker & Dunlop shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Walker & Dunlop has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, First Bank has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Walker & Dunlop and First Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walker & Dunlop 21.91% 22.86% 5.38%
First Bank 17.19% N/A N/A

Dividends

First Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Walker & Dunlop does not pay a dividend. First Bank pays out 12.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Walker & Dunlop and First Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walker & Dunlop 0 2 1 0 2.33
First Bank 0 1 1 0 2.50

Walker & Dunlop currently has a consensus price target of $44.00, indicating a potential downside of 18.34%. First Bank has a consensus price target of $14.00, indicating a potential upside of 8.11%. Given First Bank’s stronger consensus rating and higher probable upside, analysts plainly believe First Bank is more favorable than Walker & Dunlop.

Earnings & Valuation

This table compares Walker & Dunlop and First Bank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Walker & Dunlop $649.05 million 2.59 $142.17 million $4.55 11.84
First Bank $31.35 million 6.20 $9.61 million $0.64 20.23

Walker & Dunlop has higher revenue and earnings than First Bank. Walker & Dunlop is trading at a lower price-to-earnings ratio than First Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Walker & Dunlop beats First Bank on 10 of the 15 factors compared between the two stocks.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).

About First Bank

First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, and multi-family loans), residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. It operates 14 branches located in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Somerset, Randolph and Williamstown, New Jersey, and Trevose, Doylestown, Warminster, Bensalem and Levittown in Bucks County.

Receive News & Ratings for Walker & Dunlop Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Walker & Dunlop Inc. and related companies with MarketBeat.com's FREE daily email newsletter.