WesBanco (NASDAQ:WSBC) & M&F Bancorp (OTCMKTS:MFBP) Critical Review

WesBanco (NASDAQ:WSBC) and M&F Bancorp (OTCMKTS:MFBP) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

WesBanco has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.55, meaning that its share price is 155% less volatile than the S&P 500.

Earnings and Valuation

This table compares WesBanco and M&F Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WesBanco	$1.44 billion	2.33	$223.10 million	$3.10	11.26
M&F Bancorp	$29.72 million	1.76	$4.30 million	$1.30	20.75

WesBanco has higher revenue and earnings than M&F Bancorp. WesBanco is trading at a lower price-to-earnings ratio than M&F Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

WesBanco pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. WesBanco pays out 49.0% of its earnings in the form of a dividend. M&F Bancorp pays out 18.5% 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. WesBanco has raised its dividend for 14 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for WesBanco and M&F Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WesBanco	1	1	3	1	2.67
M&F Bancorp	0	0	0	0	0.00

WesBanco currently has a consensus price target of $39.50, indicating a potential upside of 13.15%. Given WesBanco’s stronger consensus rating and higher probable upside, analysts clearly believe WesBanco is more favorable than M&F Bancorp.

Profitability

This table compares WesBanco and M&F Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WesBanco	21.12%	9.76%	1.33%
M&F Bancorp	N/A	N/A	N/A

Insider and Institutional Ownership

61.4% of WesBanco shares are owned by institutional investors. 2.1% of WesBanco shares are owned by company insiders. Comparatively, 2.9% of M&F Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

WesBanco beats M&F Bancorp on 15 of the 18 factors compared between the two stocks.

About WesBanco

WesBanco, Inc. operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, mortgage banking, and insurance services to individuals and businesses in the United States. The company operates through two segments, Community Banking, and Trust and Investment Services. It offers commercial demand, individual demand, and time deposit accounts; commercial, mortgage and individual installment loans; retail loans, such as residential real estate mortgage loans, home equity lines of credit, and loans for other consumer purposes; installment loans to finance the purchase of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and various non-traditional offerings, such as insurance and securities brokerage services. The company also provides trust services; and various alternative investment products, including mutual funds and annuities. In addition, it acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. WesBanco, Inc. was founded in 1870 and is headquartered in Wheeling, West Virginia.

About M&F Bancorp

M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.