City Holding Company (NASDAQ: CHCO) and WashingtonFirst Bankshares (NASDAQ:WFBI) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitabiliy and earnings.
Insider & Institutional Ownership
62.9% of City Holding Company shares are owned by institutional investors. Comparatively, 54.3% of WashingtonFirst Bankshares shares are owned by institutional investors. 3.9% of City Holding Company shares are owned by company insiders. Comparatively, 20.7% of WashingtonFirst Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
City Holding Company has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, WashingtonFirst Bankshares has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.
City Holding Company pays an annual dividend of $1.76 per share and has a dividend yield of 2.7%. WashingtonFirst Bankshares pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. City Holding Company pays out 47.3% of its earnings in the form of a dividend. WashingtonFirst Bankshares pays out 19.9% 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.
This table compares City Holding Company and WashingtonFirst Bankshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|City Holding Company||28.38%||12.60%||1.43%|
This is a breakdown of recent recommendations and price targets for City Holding Company and WashingtonFirst Bankshares, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|City Holding Company||0||2||0||0||2.00|
City Holding Company presently has a consensus price target of $66.50, suggesting a potential upside of 0.17%. WashingtonFirst Bankshares has a consensus price target of $28.00, suggesting a potential downside of 18.08%. Given City Holding Company’s higher possible upside, research analysts plainly believe City Holding Company is more favorable than WashingtonFirst Bankshares.
Valuation & Earnings
This table compares City Holding Company and WashingtonFirst Bankshares’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|City Holding Company||$179.94 million||5.76||$58.04 million||$3.72||17.85|
|WashingtonFirst Bankshares||$86.55 million||5.14||$18.29 million||$1.40||24.33|
City Holding Company has higher revenue and earnings than WashingtonFirst Bankshares. City Holding Company is trading at a lower price-to-earnings ratio than WashingtonFirst Bankshares, indicating that it is currently the more affordable of the two stocks.
City Holding Company beats WashingtonFirst Bankshares on 10 of the 14 factors compared between the two stocks.
City Holding Company Company Profile
City Holding Company is a financial holding company. The Company conducts its principal activities through its subsidiary, City National Bank of West Virginia (City National). As of December 31, 2016, the City National provided banking, trust and investment management and other financial solutions through its network of 85 banking offices located in the states of West Virginia, Virginia, eastern Kentucky and southeastern Ohio. City National offers various products and services, including commercial banking, consumer banking, mortgage banking, and wealth management and trust services. City National provides credit, deposit and investment advisory products and services to rural and small community markets in addition to cities, including Charleston, Huntington, Martinsburg, Winchester, Staunton, Virginia Beach, Ashland and Lexington. City National offers a range of commercial banking services to corporations and other business customers.
WashingtonFirst Bankshares Company Profile
WashingtonFirst Bankshares, Inc. is a bank holding company. The Company, through its subsidiary, WashingtonFirst Bank (the Bank), operates banking offices throughout the Washington, D.C. metropolitan area. The Company’s segments include Commercial Bank, Mortgage Bank, Wealth Management and Other. In addition, the Company provides wealth management services through its subsidiary, 1st Portfolio, Inc. (Wealth Advisors), located in Fairfax, Virginia, and mortgage banking services through the Bank’s subsidiary, WashingtonFirst Mortgage Corporation, which operates in two locations: Fairfax, Virginia and Rockville, Maryland. The Company offers a range of commercial banking products and services to small-to-medium sized businesses, not-for-profit organizations, professional service firms and individuals in the greater Washington, D.C. metropolitan area.
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