Head-To-Head Comparison: Westamerica Bancorporation (NASDAQ:WABC) versus Hawthorn Bancshares (NASDAQ:HWBK)

Westamerica Bancorporation (NASDAQ:WABC) and Hawthorn Bancshares (NASDAQ:HWBK) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Risk & Volatility

Westamerica Bancorporation has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

81.9% of Westamerica Bancorporation shares are held by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are held by institutional investors. 4.4% of Westamerica Bancorporation shares are held by company insiders. Comparatively, 23.4% of Hawthorn Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Westamerica Bancorporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Hawthorn Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 3.6%. Westamerica Bancorporation pays out 29.7% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 226.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westamerica Bancorporation has increased its dividend for 32 consecutive years and Hawthorn Bancshares has increased its dividend for 4 consecutive years. Westamerica Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Westamerica Bancorporation and Hawthorn Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westamerica Bancorporation	48.35%	21.99%	2.42%
Hawthorn Bancshares	2.09%	1.65%	0.11%

Earnings & Valuation

This table compares Westamerica Bancorporation and Hawthorn Bancshares’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westamerica Bancorporation	$319.79 million	4.02	$161.77 million	$5.92	8.15
Hawthorn Bancshares	$99.50 million	1.34	$960,000.00	$0.30	63.37

Westamerica Bancorporation has higher revenue and earnings than Hawthorn Bancshares. Westamerica Bancorporation is trading at a lower price-to-earnings ratio than Hawthorn Bancshares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Westamerica Bancorporation and Hawthorn Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westamerica Bancorporation	0	2	0	0	2.00
Hawthorn Bancshares	0	0	0	0	N/A

Westamerica Bancorporation presently has a consensus price target of $53.50, indicating a potential upside of 10.93%. Given Westamerica Bancorporation’s higher probable upside, equities research analysts plainly believe Westamerica Bancorporation is more favorable than Hawthorn Bancshares.

Summary

Westamerica Bancorporation beats Hawthorn Bancshares on 13 of the 15 factors compared between the two stocks.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.