Critical Survey: Lloyds Banking Group (NYSE:LYG) & Wake Forest Bancshares (OTCMKTS:WAKE)

Wake Forest Bancshares (OTCMKTS:WAKE) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations for Wake Forest Bancshares and Lloyds Banking Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wake Forest Bancshares	0	0	0	0	0.00
Lloyds Banking Group	0	4	8	0	2.67

Profitability

This table compares Wake Forest Bancshares and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wake Forest Bancshares	N/A	N/A	N/A
Lloyds Banking Group	24.97%	10.94%	0.54%

Dividends

Wake Forest Bancshares pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Lloyds Banking Group pays an annual dividend of $0.16 per share and has a dividend yield of 2.7%. Wake Forest Bancshares pays out 39.4% of its earnings in the form of a dividend. Lloyds Banking Group pays out 37.2% 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. Lloyds Banking Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Wake Forest Bancshares and Lloyds Banking Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wake Forest Bancshares	N/A	N/A	N/A	$1.12	30.63
Lloyds Banking Group	$21.25 billion	4.08	$6.14 billion	$0.43	13.87

Lloyds Banking Group has higher revenue and earnings than Wake Forest Bancshares. Lloyds Banking Group is trading at a lower price-to-earnings ratio than Wake Forest Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

2.2% of Lloyds Banking Group shares are owned by institutional investors. 7.1% of Wake Forest Bancshares shares are owned by insiders. Comparatively, 0.0% of Lloyds Banking Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Lloyds Banking Group beats Wake Forest Bancshares on 9 of the 12 factors compared between the two stocks.

About Wake Forest Bancshares

Wake Forest Bancshares, Inc., (OTC: WAKE) parent company of Wake Forest Federal Savings and Loan Association. Based in Wake Forest, North Carolina since 1922, the Company conducts business as Wake Forest Federal from its office in Wake Forest, (Wake County), North Carolina. Wake Forest Bancshares, Inc. operates as a subsidiary of Wake Forest Bancorp, M.H.C.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.