Westamerica Bancorporation (NASDAQ:WABC) and U.S. Bancorp (NASDAQ:USB) Critical Analysis
Westamerica Bancorporation (NASDAQ:WABC) and U.S. Bancorp (NYSE:USB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Risk & Volatility
Westamerica Bancorporation has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
This table compares Westamerica Bancorporation and U.S. Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
80.6% of Westamerica Bancorporation shares are held by institutional investors. Comparatively, 73.5% of U.S. Bancorp shares are held by institutional investors. 4.3% of Westamerica Bancorporation shares are held by insiders. Comparatively, 0.2% of U.S. Bancorp 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.
This is a breakdown of current ratings and target prices for Westamerica Bancorporation and U.S. Bancorp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Westamerica Bancorporation currently has a consensus target price of $60.33, indicating a potential downside of 4.19%. U.S. Bancorp has a consensus target price of $47.08, indicating a potential upside of 24.60%. Given U.S. Bancorp’s higher possible upside, analysts clearly believe U.S. Bancorp is more favorable than Westamerica Bancorporation.
Valuation and Earnings
This table compares Westamerica Bancorporation and U.S. Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Westamerica Bancorporation||$206.09 million||8.23||$80.39 million||$2.98||21.13|
|U.S. Bancorp||$27.33 billion||2.08||$6.91 billion||$4.34||8.71|
U.S. Bancorp has higher revenue and earnings than Westamerica Bancorporation. U.S. Bancorp is trading at a lower price-to-earnings ratio than Westamerica Bancorporation, indicating that it is currently the more affordable of the two stocks.
Westamerica Bancorporation pays an annual dividend of $1.64 per share and has a dividend yield of 2.6%. U.S. Bancorp pays an annual dividend of $1.68 per share and has a dividend yield of 4.4%. Westamerica Bancorporation pays out 55.0% of its earnings in the form of a dividend. U.S. Bancorp pays out 38.7% 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. Westamerica Bancorporation has raised its dividend for 1 consecutive years and U.S. Bancorp has raised its dividend for 9 consecutive years. U.S. Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
U.S. Bancorp beats Westamerica Bancorporation on 10 of the 17 factors compared between the two stocks.
Westamerica Bancorporation Company Profile
Westamerica Bancorporation provides banking solutions. The bank offers demand deposits and interest and non-interest bearing time and savings deposits. The company's deposits include jumbo deposits and retail time deposits. The company provides commercial and industrial loans, consumer loans, commercial real estate loans, and other loans and leases. The company offers consumer loans, including credit card loans, revolving credit plans, and automotive loans. The company offers commercial real estate loans for land development and on-site construction of industrial, commercial, residential, or farm buildings in the United States; real estate-backed residential loans; and commercial loans collateralized by real estate properties. The company offers domestic and foreign commercial and industrial loans. The bank offers loans for the purpose of financing agricultural production; loans which include planned and unplanned overdrafts, to governments in non-U.S. countries, to their official institutions, and to international and regional institutions. For 2017, the company has an asset value of 5.6 million USD. It has generated a net income of 71,564 USD in December 31, 2017. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in December 1982. Westamerica Bancorporation was founded in 1972 and is based in San Rafael, California.
U.S. Bancorp Company Profile
U.S. Bancorp, a financial services holding company, provides various financial services in the United States. It operates in five segments: Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products, as well as credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, the company offers investment and insurance products to its customers principally within its markets, as well as fund administration services to a range of mutual and other funds. Further, it provides corporate and purchasing card, and corporate trust services; and merchant processing services, as well as cash and investment management, ATM processing, mortgage banking, and brokerage and leasing services. The company offers its products and services through operating a network of 3,018 banking offices principally operating in the Midwest and West regions of the United States, as well as through online services and over mobile devices. It also operates a network of 4,681 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.
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