West Bancorporation (NASDAQ:WTBA – Get Free Report) and Capitol Federal Financial (NASDAQ:CFFN – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.
Profitability
This table compares West Bancorporation and Capitol Federal Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| West Bancorporation | 17.30% | 14.88% | 0.95% |
| Capitol Federal Financial | 17.80% | 7.46% | 0.79% |
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for West Bancorporation and Capitol Federal Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| West Bancorporation | 0 | 3 | 1 | 0 | 2.25 |
| Capitol Federal Financial | 0 | 3 | 1 | 0 | 2.25 |
Institutional & Insider Ownership
44.3% of West Bancorporation shares are held by institutional investors. Comparatively, 88.5% of Capitol Federal Financial shares are held by institutional investors. 4.6% of West Bancorporation shares are held by insiders. Comparatively, 2.8% of Capitol Federal Financial shares are held 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.
Earnings and Valuation
This table compares West Bancorporation and Capitol Federal Financial”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| West Bancorporation | $202.45 million | 2.27 | $32.56 million | $2.06 | 13.09 |
| Capitol Federal Financial | $420.24 million | 2.56 | $68.03 million | $0.60 | 14.13 |
Capitol Federal Financial has higher revenue and earnings than West Bancorporation. West Bancorporation is trading at a lower price-to-earnings ratio than Capitol Federal Financial, indicating that it is currently the more affordable of the two stocks.
Dividends
West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 4.0%. West Bancorporation pays out 48.5% of its earnings in the form of a dividend. Capitol Federal Financial pays out 56.7% 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.
Risk and Volatility
West Bancorporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.
About West Bancorporation
West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.
About Capitol Federal Financial
Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit. It also provides various loan products, such as one- to four-family residential real estate loans, commercial real estate, commercial and industrial, construction loans, and small business loans, as well as consumer loans, which include home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; credit cards; mortgage loan; operates a call center; and invests in various securities. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, and a portion of the metropolitan area of greater Kansas City. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.
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