Walter Investment Management (NYSE: WAC) and Bank Of Kentucky Financial (NASDAQ:BKYF) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares Walter Investment Management and Bank Of Kentucky Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walter Investment Management -22.21% -796.24% -0.70%
Bank Of Kentucky Financial 21.85% 8.12% 0.86%

Volatility and Risk

Walter Investment Management has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Bank Of Kentucky Financial has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

40.2% of Walter Investment Management shares are owned by institutional investors. 46.6% of Walter Investment Management shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Walter Investment Management and Bank Of Kentucky Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walter Investment Management 1 1 0 0 1.50
Bank Of Kentucky Financial 0 0 0 0 N/A

Walter Investment Management presently has a consensus price target of $1.13, suggesting a potential upside of 108.33%. Given Walter Investment Management’s higher probable upside, equities research analysts plainly believe Walter Investment Management is more favorable than Bank Of Kentucky Financial.

Valuation & Earnings

This table compares Walter Investment Management and Bank Of Kentucky Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Walter Investment Management $995.72 million 0.02 -$833.85 million ($6.52) -0.08
Bank Of Kentucky Financial N/A N/A N/A $2.30 22.17

Bank Of Kentucky Financial has lower revenue, but higher earnings than Walter Investment Management. Walter Investment Management is trading at a lower price-to-earnings ratio than Bank Of Kentucky Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Bank Of Kentucky Financial beats Walter Investment Management on 5 of the 9 factors compared between the two stocks.

About Walter Investment Management

Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.

About Bank Of Kentucky Financial

The Bank of Kentucky Financial Corporation is a bank holding company. The Company, through its subsidiary The Bank of Kentucky, Inc. (the Bank), is engaged in the banking business. The Bank provides financial services and other financial solutions through 32 offices located in northern Kentucky. The principal products produced and services rendered by the Bank include commercial banking, consumer banking and trust services. The Bank provides a range of commercial banking services to corporations and other business clients that include loans and deposit services, including checking, lockbox services and other treasury management services. The Bank provides banking services to consumers, including checking, savings and money market accounts, as well as certificates of deposits and individual retirement accounts. It also offers specialized services in the areas of fiduciary services and wealth management.

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