Contrasting SB Financial Group (NASDAQ:SBFG) and Washington Trust Bancorp (NASDAQ:WASH)

Washington Trust Bancorp (NASDAQ:WASH) and SB Financial Group (NASDAQ:SBFG) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

65.8% of Washington Trust Bancorp shares are held by institutional investors. Comparatively, 66.7% of SB Financial Group shares are held by institutional investors. 1.1% of Washington Trust Bancorp shares are held by insiders. Comparatively, 5.7% of SB Financial Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Washington Trust Bancorp has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, SB Financial Group has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.2%. SB Financial Group pays an annual dividend of $0.62 per share and has a dividend yield of 2.9%. Washington Trust Bancorp pays out 83.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SB Financial Group pays out 28.2% of its earnings in the form of a dividend. SB Financial Group has increased its dividend for 12 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and price targets for Washington Trust Bancorp and SB Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	1	3	0	1	2.20
SB Financial Group	0	1	1	0	2.50

Washington Trust Bancorp currently has a consensus target price of $31.33, suggesting a potential downside of 12.82%. Given Washington Trust Bancorp’s higher probable upside, equities research analysts plainly believe Washington Trust Bancorp is more favorable than SB Financial Group.

Valuation and Earnings

This table compares Washington Trust Bancorp and SB Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$222.05 million	3.08	$52.24 million	$2.70	13.31
SB Financial Group	$91.03 million	1.50	$13.97 million	$2.20	9.85

Washington Trust Bancorp has higher revenue and earnings than SB Financial Group. SB Financial Group is trading at a lower price-to-earnings ratio than Washington Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Washington Trust Bancorp and SB Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	13.26%	9.83%	0.78%
SB Financial Group	15.35%	11.02%	0.99%

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.