Washington Trust Bancorp (NASDAQ: WASH) and Prosperity Bancshares (NYSE:PB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.
This is a summary of recent ratings and recommmendations for Washington Trust Bancorp and Prosperity Bancshares, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Washington Trust Bancorp||0||2||0||0||2.00|
Washington Trust Bancorp presently has a consensus target price of $55.00, suggesting a potential downside of 0.36%. Prosperity Bancshares has a consensus target price of $71.05, suggesting a potential upside of 7.78%. Given Prosperity Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Prosperity Bancshares is more favorable than Washington Trust Bancorp.
Volatility and Risk
Washington Trust Bancorp has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
This table compares Washington Trust Bancorp and Prosperity Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Washington Trust Bancorp||23.63%||12.56%||1.14%|
Earnings and Valuation
This table compares Washington Trust Bancorp and Prosperity Bancshares’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Washington Trust Bancorp||$198.60 million||4.78||$46.48 million||$2.89||19.10|
|Prosperity Bancshares||$794.20 million||5.77||$274.46 million||$3.95||16.69|
Prosperity Bancshares has higher revenue and earnings than Washington Trust Bancorp. Prosperity Bancshares 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.
Washington Trust Bancorp pays an annual dividend of $1.56 per share and has a dividend yield of 2.8%. Prosperity Bancshares pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. Washington Trust Bancorp pays out 54.0% of its earnings in the form of a dividend. Prosperity Bancshares pays out 34.4% 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. Prosperity Bancshares has raised its dividend for 13 consecutive years.
Insider & Institutional Ownership
55.2% of Washington Trust Bancorp shares are owned by institutional investors. Comparatively, 72.0% of Prosperity Bancshares shares are owned by institutional investors. 2.6% of Washington Trust Bancorp shares are owned by company insiders. Comparatively, 4.9% of Prosperity Bancshares shares are owned 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.
Prosperity Bancshares beats Washington Trust Bancorp on 14 of the 17 factors compared between the two stocks.
About Washington Trust Bancorp
Washington Trust Bancorp, Inc. is a bank holding company and financial holding company. The Company is a holding company of The Washington Trust Company, of Westerly (the Bank), a Rhode Island chartered commercial bank. The Company operates through two business segments: Commercial Banking and Wealth Management Services. The Company offers a range of product lines of banking and financial services to individuals and businesses, including commercial, residential and consumer lending, retail and commercial deposit products, and wealth management services through its offices in Rhode Island, eastern Massachusetts and Connecticut; its automated teller machines (ATMs); telephone banking; mobile banking and its Internet Website (www.washtrust.com). Its investment securities portfolio amounted to $755.5 million, as of December 31, 2016. The Company’s total loan portfolio amounted to $3.2 billion, as of December 31, 2016.
About Prosperity Bancshares
Prosperity Bancshares, Inc. is a financial holding company, which operates through its bank subsidiary, Prosperity Bank (the Bank). The Bank provides a range of financial products and services to small and medium-sized businesses and consumers. The Company, through the Bank, offers a range of loan and deposit products to its customers. At December 31, 2016, the Bank maintained approximately 598,400 separate deposit accounts including certificates of deposit and 53,600 separate loan accounts. It offered commercial real estate (including multifamily residential) and one- to four-family residential loans, as of December 31, 2016. As of December 31, 2016, the Bank operated 245 full service banking locations; 65 in the Houston area; 29 in the South Texas area; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area; 34 in the West Texas area; 16 in the Bryan/College Station area, six in the Central Oklahoma area and eight in the Tulsa, Oklahoma area.
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