Landmark Bancorp (NASDAQ:LARK) & Waterstone Financial (NASDAQ:WSBF) Critical Comparison

Landmark Bancorp (NASDAQ:LARK) and Waterstone Financial (NASDAQ:WSBF) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Earnings and Valuation

This table compares Landmark Bancorp and Waterstone Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Landmark Bancorp	$95.97 million	1.71	$18.77 million	$3.07	8.79
Waterstone Financial	$202.47 million	1.67	$18.69 million	$1.33	13.75

Landmark Bancorp has higher earnings, but lower revenue than Waterstone Financial. Landmark Bancorp is trading at a lower price-to-earnings ratio than Waterstone Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Landmark Bancorp and Waterstone Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Landmark Bancorp	0	1	0	0	2.00
Waterstone Financial	0	0	1	0	3.00

Volatility and Risk

Landmark Bancorp has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Insider & Institutional Ownership

25.7% of Landmark Bancorp shares are held by institutional investors. Comparatively, 62.7% of Waterstone Financial shares are held by institutional investors. 12.8% of Landmark Bancorp shares are held by insiders. Comparatively, 8.3% of Waterstone 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.

Dividends

Landmark Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. Waterstone Financial pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Landmark Bancorp pays out 26.1% of its earnings in the form of a dividend. Waterstone Financial pays out 45.1% 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. Landmark Bancorp has increased its dividend for 6 consecutive years.

Profitability

This table compares Landmark Bancorp and Waterstone Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Landmark Bancorp	19.56%	12.61%	1.17%
Waterstone Financial	12.08%	6.99%	1.07%

Summary

Landmark Bancorp beats Waterstone Financial on 9 of the 16 factors compared between the two stocks.

About Landmark Bancorp

Landmark Bancorp, Inc. operates as the financial holding company for Landmark National Bank that provides various financial and banking services to its local communities. It offers non-interest bearing demand, money market, checking, and savings accounts, as well as certificates of deposit. The company also provides one-to-four family residential real estate, construction and land, commercial real estate, commercial, paycheck protection program, municipal, and agriculture loans; and consumer and other loans, such as automobile, boat, and home improvement and home equity loans, as well as insurance, and mobile and online banking services. In addition, the company invests in certain investment and mortgage-related securities. It operates in the eastern, central, southeast, and southwest Kansas. The company was founded in 1885 and is headquartered in Manhattan, Kansas.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.