Financial Review: Westamerica Bancorporation (WABC) vs. Banco Santander-Chile (BSAC)

Westamerica Bancorporation (NASDAQ: WABC) and Banco Santander-Chile (NYSE:BSAC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Insider & Institutional Ownership

84.8% of Westamerica Bancorporation shares are held by institutional investors. Comparatively, 16.8% of Banco Santander-Chile shares are held by institutional investors. 4.9% of Westamerica Bancorporation shares are held by company 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Westamerica Bancorporation and Banco Santander-Chile, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westamerica Bancorporation 2 2 0 0 1.50
Banco Santander-Chile 1 4 0 0 1.80

Westamerica Bancorporation currently has a consensus price target of $54.00, indicating a potential downside of 5.28%. Banco Santander-Chile has a consensus price target of $28.00, indicating a potential downside of 12.77%. Given Westamerica Bancorporation’s higher probable upside, analysts plainly believe Westamerica Bancorporation is more favorable than Banco Santander-Chile.

Valuation and Earnings

This table compares Westamerica Bancorporation and Banco Santander-Chile’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westamerica Bancorporation $190.46 million 7.91 $50.02 million $1.90 30.01
Banco Santander-Chile $4.14 billion 3.65 $915.64 million $1.86 17.26

Banco Santander-Chile has higher revenue and earnings than Westamerica Bancorporation. Banco Santander-Chile is trading at a lower price-to-earnings ratio than Westamerica Bancorporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Westamerica Bancorporation and Banco Santander-Chile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westamerica Bancorporation 26.26% 10.30% 1.13%
Banco Santander-Chile 20.98% 18.00% 1.51%

Risk and Volatility

Westamerica Bancorporation has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Banco Santander-Chile has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Dividends

Westamerica Bancorporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. Banco Santander-Chile pays an annual dividend of $0.85 per share and has a dividend yield of 2.6%. Westamerica Bancorporation pays out 84.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banco Santander-Chile pays out 45.7% of its earnings in the form of a dividend. Banco Santander-Chile has increased its dividend for 5 consecutive years.

Summary

Westamerica Bancorporation beats Banco Santander-Chile on 9 of the 16 factors compared between the two stocks.

Westamerica Bancorporation Company Profile

Westamerica Bancorporation is a bank holding company. The Company provides a range of banking services to individual and corporate customers in Northern and Central California through its subsidiary bank, Westamerica Bank. The communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south. It provides a range of loans, including commercial loans, commercial real estate loans, construction loans, residential real estate loans, and consumer installment and other loans. It maintains a securities portfolio consisting of securities issued by the United States Treasury, United States Government sponsored entities, agency and non-agency mortgage backed securities (MBS), non-agency commercial MBS, agency residential collateralized mortgage obligations (CMO), non-agency residential CMO, obligations of states and political subdivisions, asset-backed securities, corporate securities and other securities.

Banco Santander-Chile Company Profile

Banco Santander-Chile (the Bank), formerly Banco Santander Chile, is a Chilean bank. The Bank’s segments include Retail banking, Middle-market, Global Corporate Banking and Corporate Activities (Other). The Retail Banking segment consists of individuals and small to middle-sized entities (SMEs). The Middle-market segment serves companies and large corporations. The Global Corporate Banking segment consists of foreign and domestic multinational companies. The Corporate Activities segment includes its Financial Management Division, which develops global management functions. It provides a range of commercial and retail banking services to its customers, including Chilean peso and foreign currency denominated loans to finance a range of commercial transactions, trade, foreign currency forward contracts and credit lines and a range of retail banking services, including mortgage financing. In addition to its traditional banking operations, the Bank offers a range of financial services.

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