Reviewing Walter Investment Management (WAC) & Hingham Institution for Savings (HIFS)

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

Dividends

Hingham Institution for Savings pays an annual dividend of $1.36 per share and has a dividend yield of 0.7%. Walter Investment Management does not pay a dividend. Hingham Institution for Savings pays out 11.5% of its earnings in the form of a dividend.

Profitability

This table compares Walter Investment Management and Hingham Institution for Savings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walter Investment Management -22.21% N/A -0.70%
Hingham Institution for Savings 31.23% N/A N/A

Analyst Recommendations

This is a summary of recent recommendations and price targets for Walter Investment Management and Hingham Institution for Savings, 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
Hingham Institution for Savings 0 0 0 0 N/A

Walter Investment Management currently has a consensus target price of $1.13, suggesting a potential upside of 84.43%. Given Walter Investment Management’s higher possible upside, equities analysts plainly believe Walter Investment Management is more favorable than Hingham Institution for Savings.

Insider & Institutional Ownership

39.7% of Walter Investment Management shares are owned by institutional investors. Comparatively, 27.2% of Hingham Institution for Savings 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 stock will outperform the market over the long term.

Valuation & Earnings

This table compares Walter Investment Management and Hingham Institution for Savings’ 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) -0.09
Hingham Institution for Savings $82.47 million 5.31 $25.76 million $11.81 17.59

Hingham Institution for Savings has lower revenue, but higher earnings than Walter Investment Management. Walter Investment Management is trading at a lower price-to-earnings ratio than Hingham Institution for Savings, indicating that it is currently the more affordable of the two stocks.

Summary

Hingham Institution for Savings beats Walter Investment Management on 7 of the 12 factors compared between the two stocks.

Walter Investment Management Company Profile

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.

Hingham Institution for Savings Company Profile

Hingham Institution for Savings (the Bank) is a Massachusetts-chartered savings bank (the Bank). The Bank is principally engaged in the business of residential and commercial real estate mortgage lending, funded by a retail deposit network and borrowings. The Bank provides a range of financial services to individuals and small businesses through its approximately 10 offices in Boston and southeastern Massachusetts. Its primary deposit products are savings, checking, and term certificate accounts, and its primary lending products are residential and commercial mortgage loans secured by properties in Eastern Massachusetts. The Bank offers personal checking accounts, money market and savings accounts, as well as longer term certificates of deposit for individuals, businesses, non-profits, cities and towns. The Bank’s loan portfolio includes residential real estate, commercial real estate, construction, home equity, commercial and consumer segments.

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