Wintrust Financial (NASDAQ:WTFC) and South Plains Financial (NASDAQ:SPFI) Financial Analysis

South Plains Financial (NASDAQ:SPFI) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Volatility and Risk

South Plains Financial has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares South Plains Financial and Wintrust Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$296.89 million	2.72	$58.47 million	$3.67	11.68
Wintrust Financial	$4.23 billion	2.30	$823.84 million	$12.45	11.59

Wintrust Financial has higher revenue and earnings than South Plains Financial. Wintrust Financial is trading at a lower price-to-earnings ratio than South Plains Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for South Plains Financial and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	1	6	0	2.86
Wintrust Financial	0	5	9	0	2.64

South Plains Financial currently has a consensus target price of $49.60, suggesting a potential upside of 15.75%. Wintrust Financial has a consensus target price of $176.50, suggesting a potential upside of 22.30%. Given Wintrust Financial’s higher probable upside, analysts clearly believe Wintrust Financial is more favorable than South Plains Financial.

Profitability

This table compares South Plains Financial and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	20.79%	12.36%	1.37%
Wintrust Financial	20.72%	13.37%	1.28%

Dividends

South Plains Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. Wintrust Financial pays an annual dividend of $2.20 per share and has a dividend yield of 1.5%. South Plains Financial pays out 19.6% of its earnings in the form of a dividend. Wintrust Financial pays out 17.7% 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. South Plains Financial has raised its dividend for 5 consecutive years and Wintrust Financial has raised its dividend for 12 consecutive years.

Institutional and Insider Ownership

54.9% of South Plains Financial shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 24.3% of South Plains Financial shares are held by company insiders. Comparatively, 1.2% of Wintrust Financial shares are held by company 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

Wintrust Financial beats South Plains Financial on 10 of the 17 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.