Analyzing Walker & Dunlop (WD) & Meta Financial Group (CASH)

Walker & Dunlop (NYSE: WD) and Meta Financial Group (NASDAQ:CASH) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Risk and Volatility

Walker & Dunlop has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Meta Financial Group has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares Walker & Dunlop and Meta Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Walker & Dunlop $575.28 million 2.55 $113.89 million $4.65 10.15
Meta Financial Group $280.27 million 3.21 $44.91 million $4.79 19.39

Walker & Dunlop has higher revenue and earnings than Meta Financial Group. Walker & Dunlop is trading at a lower price-to-earnings ratio than Meta Financial Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.5% of Walker & Dunlop shares are owned by institutional investors. Comparatively, 76.9% of Meta Financial Group shares are owned by institutional investors. 11.7% of Walker & Dunlop shares are owned by company insiders. Comparatively, 5.4% of Meta Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Walker & Dunlop and Meta Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walker & Dunlop 0 1 1 0 2.50
Meta Financial Group 0 0 3 0 3.00

Walker & Dunlop currently has a consensus target price of $55.50, indicating a potential upside of 17.53%. Meta Financial Group has a consensus target price of $94.33, indicating a potential upside of 1.54%. Given Walker & Dunlop’s higher possible upside, equities research analysts clearly believe Walker & Dunlop is more favorable than Meta Financial Group.

Profitability

This table compares Walker & Dunlop and Meta Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walker & Dunlop 21.81% 22.35% 4.65%
Meta Financial Group 16.03% 15.91% 1.50%

Dividends

Meta Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Walker & Dunlop does not pay a dividend. Meta Financial Group pays out 10.9% of its earnings in the form of a dividend.

Summary

Walker & Dunlop beats Meta Financial Group on 10 of the 16 factors compared between the two stocks.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).

About Meta Financial Group

Meta Financial Group, Inc. is a unitary savings and loan holding company. The Company operates through its banking subsidiary, MetaBank (the Bank). Its segments include Payments, Banking, and Corporate Services/Other. MetaBank is both a community-oriented financial institution offering a range of financial services to meet the needs of the communities it serves and a payments company providing services on a nationwide basis. It operates in both the banking and payments industries through MetaBank, its retail banking operation; Meta Payment Systems (MPS), its electronic payments division; AFS/IBEX Financial Services Inc. (AFS/IBEX), its insurance premium financing division, and Refund Advantage, EPS Financial, LLC (EPS) Financial and Specialty Consumer Services, its tax-related financial solutions divisions.

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