South Plains Financial (NASDAQ:SPFI) and Washington Trust Bancorp (NASDAQ:WASH) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.
This table compares South Plains Financial and Washington Trust Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|South Plains Financial||15.41%||11.68%||1.05%|
|Washington Trust Bancorp||26.06%||14.11%||1.32%|
This is a summary of recent ratings and recommmendations for South Plains Financial and Washington Trust Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|South Plains Financial||0||0||2||0||3.00|
|Washington Trust Bancorp||0||2||0||0||2.00|
South Plains Financial currently has a consensus price target of $21.50, indicating a potential upside of 36.51%. Washington Trust Bancorp has a consensus price target of $54.00, indicating a potential upside of 49.13%. Given Washington Trust Bancorp’s higher probable upside, analysts clearly believe Washington Trust Bancorp is more favorable than South Plains Financial.
Valuation and Earnings
This table compares South Plains Financial and Washington Trust Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|South Plains Financial||$189.57 million||1.50||$29.22 million||$1.69||9.32|
|Washington Trust Bancorp||$264.74 million||2.37||$69.12 million||$3.96||9.14|
Washington Trust Bancorp has higher revenue and earnings than South Plains Financial. Washington Trust Bancorp 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.
Insider & Institutional Ownership
22.7% of South Plains Financial shares are held by institutional investors. Comparatively, 72.7% of Washington Trust Bancorp shares are held by institutional investors. 2.3% of Washington Trust Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
South Plains Financial pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Washington Trust Bancorp pays an annual dividend of $2.04 per share and has a dividend yield of 5.6%. South Plains Financial pays out 7.1% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 51.5% 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. Washington Trust Bancorp has raised its dividend for 9 consecutive years. Washington Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Washington Trust Bancorp beats South Plains Financial on 12 of the 16 factors compared between the two stocks.
South Plains Financial Company Profile
There is no company description available for South Plains Financial Inc.
Washington Trust Bancorp Company Profile
Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that offers various financial products and services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment provides various commercial and retail lending products, which include commercial real estate loans consisting of commercial mortgages and construction loans; commercial and industrial loans; residential real estate 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 offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits, as well as debit card, ATM, telephone and Internet banking, mobile banking, remote deposit capture, and other cash management services. The Wealth Management Services segment provides 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. This segment serves personal and institutional, and mutual funds clients. The company also operates as a licensed broker-dealer that offers variable annuities, college savings plans, and mutual funds. As of December 31, 2018, it had 10 branch offices located in southern Rhode Island; 11 branch offices located in the greater Providence area in Rhode Island; and 1 branch office located in southeastern Connecticut. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.
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