Comparing Washington Trust Bancorp (NASDAQ:WASH) and SB Financial Group (NASDAQ:SBFG)

SB Financial Group (NASDAQ:SBFG) and Washington Trust Bancorp (NASDAQ:WASH) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Dividends

SB Financial Group pays an annual dividend of $0.62 per share and has a dividend yield of 3.0%. Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.2%. SB Financial Group pays out 28.2% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 83.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SB Financial Group has increased its dividend for 12 consecutive years.

Profitability

This table compares SB Financial Group and Washington Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SB Financial Group	15.35%	11.02%	0.99%
Washington Trust Bancorp	13.26%	9.83%	0.78%

Insider and Institutional Ownership

66.7% of SB Financial Group shares are owned by institutional investors. Comparatively, 65.8% of Washington Trust Bancorp shares are owned by institutional investors. 5.7% of SB Financial Group shares are owned by company insiders. Comparatively, 1.1% of Washington Trust Bancorp shares are owned by company 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.

Earnings and Valuation

This table compares SB Financial Group and Washington Trust Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SB Financial Group	$91.03 million	1.45	$13.97 million	$2.20	9.51
Washington Trust Bancorp	$393.95 million	1.73	$52.24 million	$2.70	13.30

Washington Trust Bancorp has higher revenue and earnings than SB Financial Group. SB Financial Group 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.

Volatility and Risk

SB Financial Group has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, Washington Trust Bancorp has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for SB Financial Group and Washington Trust Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SB Financial Group	0	1	1	0	2.50
Washington Trust Bancorp	1	3	0	1	2.20

Washington Trust Bancorp has a consensus target price of $31.33, indicating a potential downside of 12.72%. Given Washington Trust Bancorp’s higher probable upside, analysts plainly believe Washington Trust Bancorp is more favorable than SB Financial Group.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.