Washington Trust Bancorp (NASDAQ: WASH) and S & T Bancorp (NASDAQ:STBA) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.
Institutional and Insider Ownership
55.1% of Washington Trust Bancorp shares are owned by institutional investors. Comparatively, 55.2% of S & T Bancorp shares are owned by institutional investors. 2.6% of Washington Trust Bancorp shares are owned by insiders. Comparatively, 2.7% of S & T Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for Washington Trust Bancorp and S & T Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Washington Trust Bancorp||0||1||1||0||2.50|
|S & T Bancorp||0||3||0||0||2.00|
Washington Trust Bancorp currently has a consensus price target of $55.00, suggesting a potential upside of 3.68%. S & T Bancorp has a consensus price target of $39.00, suggesting a potential downside of 1.42%. Given Washington Trust Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe Washington Trust Bancorp is more favorable than S & T Bancorp.
This table compares Washington Trust Bancorp and S & T Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Washington Trust Bancorp||23.63%||12.44%||1.14%|
|S & T Bancorp||26.44%||9.41%||1.15%|
Volatility & Risk
Washington Trust Bancorp has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, S & T Bancorp has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.
Washington Trust Bancorp pays an annual dividend of $1.56 per share and has a dividend yield of 2.9%. S & T Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. Washington Trust Bancorp pays out 54.0% of its earnings in the form of a dividend. S & T Bancorp pays out 37.8% 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.
Valuation and Earnings
This table compares Washington Trust Bancorp and S & T Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Washington Trust Bancorp||$198.60 million||4.60||$46.48 million||$2.89||18.36|
|S & T Bancorp||$282.41 million||4.90||$71.39 million||$2.33||16.98|
S & T Bancorp has higher revenue and earnings than Washington Trust Bancorp. S & T Bancorp is trading at a lower price-to-earnings ratio than Washington Trust Bancorp, indicating that it is currently the more affordable of the two stocks.
S & T Bancorp beats Washington Trust Bancorp on 9 of the 16 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.
S & T Bancorp Company Profile
S&T Bancorp, Inc. (S&T) is a bank holding company. The Company operates through three segments: Community Banking, Wealth Management and Insurance. The Community Banking segment offers services, which include accepting time and demand deposits, and originating commercial and consumer loans. The Wealth Management segment offers brokerage services, serves as executor and trustee under wills and deeds and as guardian and custodian of employee benefits and provides other trust services. In addition, it is a registered investment advisor that manages private investment accounts for individuals and institutions. The insurance segment includes an insurance agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions and personal insurance lines. The Company’s subsidiaries include S&T Bank, 9th Street Holdings, Inc. and STBA Capital Trust I.
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