Financial Institutions (FISI) & Westamerica Bancorporation (WABC) Critical Review

Financial Institutions (NASDAQ: FISI) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Risk and Volatility

Financial Institutions has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares Financial Institutions and Westamerica Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Financial Institutions 20.41% 9.10% 0.79%
Westamerica Bancorporation 27.34% 10.73% 1.16%

Analyst Ratings

This is a summary of recent ratings and price targets for Financial Institutions and Westamerica Bancorporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Financial Institutions 0 2 1 0 2.33
Westamerica Bancorporation 2 2 0 0 1.50

Financial Institutions currently has a consensus target price of $34.17, suggesting a potential upside of 0.34%. Westamerica Bancorporation has a consensus target price of $54.67, suggesting a potential downside of 9.21%. Given Financial Institutions’ stronger consensus rating and higher possible upside, research analysts clearly believe Financial Institutions is more favorable than Westamerica Bancorporation.

Valuation and Earnings

This table compares Financial Institutions and Westamerica Bancorporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Financial Institutions $164.84 million 3.28 $33.52 million $1.94 17.55
Westamerica Bancorporation $190.46 million 8.42 $50.02 million N/A N/A

Westamerica Bancorporation has higher revenue and earnings than Financial Institutions.

Insider & Institutional Ownership

69.7% of Financial Institutions shares are owned by institutional investors. Comparatively, 85.3% of Westamerica Bancorporation shares are owned by institutional investors. 4.3% of Financial Institutions shares are owned by insiders. Comparatively, 4.5% of Westamerica Bancorporation shares are owned 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.

Dividends

Financial Institutions pays an annual dividend of $0.96 per share and has a dividend yield of 2.8%. Westamerica Bancorporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.7%. Financial Institutions pays out 49.5% of its earnings in the form of a dividend. Westamerica Bancorporation has raised its dividend for 5 consecutive years.

Summary

Westamerica Bancorporation beats Financial Institutions on 11 of the 16 factors compared between the two stocks.

Financial Institutions Company Profile

Financial Institutions, Inc. operates as the holding company for Five Star Bank that provides banking and financial services to individuals, municipalities, and businesses. It operates in two segments, Banking and Non-Banking. The company offers checking and savings account programs, including money market accounts, certificates of deposit, and sweep investments, as well as individual retirement and other qualified plan accounts. It also provides short and medium-term commercial loans for working capital, business expansion, and purchase of equipment; commercial business loans to the agricultural industry for short-term crop production, farm equipment, and livestock financing; commercial mortgage loans to finance the purchase of real property; and one-to-four family residential mortgage loans, home improvement loans, closed-end home equity loans, and home equity lines of credit, as well as consumer loans, such as automobile, recreational vehicle, boat, personal, and deposit account collateralized loans. In addition, the company provides personal insurance, including automobile, homeowners, boat, recreational vehicle, landlord, and umbrella coverage; commercial insurance, such as property, liability, automobile, inland marine, workers compensation, bonds, crop, and umbrella insurance products; and financial services comprising life and disability insurance, Medicare supplements, long-term care, annuities, mutual funds, and retirement programs. Further, it offers customized investment management, investment consulting and advisory, and wealth management services, as well as retirement plan services; and invests in various securities. As of February 28, 2018, the company operated a network of approximately 50 offices throughout Western and Central New York State. Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.

Westamerica Bancorporation Company Profile

Westamerica Bancorporation operates as a bank holding company for Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit to local businesses and professionals. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as other loans primarily consisting of indirect automobile loans. Westamerica Bancorporation operates through 82 branch offices in 21 counties in Northern and Central California. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. Westamerica Bancorporation was founded in 1972 and is headquartered in San Rafael, California.

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