Bank of Marin Bancorp (NASDAQ:BMRC) versus Great Western Bancorp (NASDAQ:GWB) Critical Analysis

Great Western Bancorp (NYSE:GWB) and Bank of Marin Bancorp (NASDAQ:BMRC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of current ratings for Great Western Bancorp and Bank of Marin Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Great Western Bancorp 0 1 2 0 2.67
Bank of Marin Bancorp 0 1 0 0 2.00

Great Western Bancorp presently has a consensus price target of $37.00, suggesting a potential upside of 6.69%. Given Great Western Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe Great Western Bancorp is more favorable than Bank of Marin Bancorp.

Volatility & Risk

Great Western Bancorp has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Great Western Bancorp and Bank of Marin Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Great Western Bancorp 27.73% 9.01% 1.31%
Bank of Marin Bancorp 31.54% 10.73% 1.38%

Dividends

Great Western Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 3.5%. Bank of Marin Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Great Western Bancorp pays out 40.8% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out 36.1% 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.

Earnings and Valuation

This table compares Great Western Bancorp and Bank of Marin Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Great Western Bancorp $603.65 million 3.23 $167.37 million $2.94 11.80
Bank of Marin Bancorp $105.22 million 5.81 $32.62 million $2.33 19.31

Great Western Bancorp has higher revenue and earnings than Bank of Marin Bancorp. Great Western Bancorp is trading at a lower price-to-earnings ratio than Bank of Marin Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

96.3% of Great Western Bancorp shares are owned by institutional investors. Comparatively, 44.4% of Bank of Marin Bancorp shares are owned by institutional investors. 0.4% of Great Western Bancorp shares are owned by company insiders. Comparatively, 5.3% of Bank of Marin Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Great Western Bancorp beats Bank of Marin Bancorp on 9 of the 16 factors compared between the two stocks.

About Great Western Bancorp

Great Western Bancorp, Inc. operates as the bank holding company for Great Western Bank that provides business and agri-business banking, retail banking, and wealth management services in the United States. The company offers noninterest-bearing demand accounts, interest-bearing demand accounts, interest-bearing non-transaction accounts, time deposits, and corporate credit cards. It also provides commercial real estate (CRE) loans, including owner-occupied and non-owner-occupied CRE loans, multifamily residential real estate loans, and construction and development loans; commercial non-real estate loans, such as working capital and other shorter-term lines of credit, and fixed-rate loans; short-term working capital funding, long-term land-related lending, and other tailored services to agri-businesses; and residential mortgage, home equity, auto, and other loans, as well as home equity and general lines of credit. In addition, the company offers wealth management solutions comprising financial planning, private banking, investment management, and trust services; cash management, online business deposit, and wire transfer services; crop insurance; and online, telephone, and mobile banking services. It primarily serves hospitality/tourism, agri-business, freight and transport, and healthcare sectors. As of September 30, 2018, the company's branch network consisted of 174 branch offices located in 130 communities in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota, as well as operated 163 ATMs and 11 company-owned ATMs at off-site locations. Great Western Bancorp, Inc. was founded in 1935 and is headquartered in Sioux Falls, South Dakota.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to professionals, small and middle-market businesses, individuals, and not-for-profit organizations in California, the United States. The company offers personal and business checking and savings accounts; and time certificates of deposit, individual retirement accounts, health savings accounts, and demand deposit marketplace accounts, as well as certificate of deposit account registry and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant card and cash management services; credit cards; mobile deposit, remote deposit capture, automated clearing house, and image lockbox services, as well as wire transfers; fraud detection tools; and valet pick-up service for non-cash deposits. Further, it provides wealth management and trust services comprising customized investment portfolio management, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and Internet banking services. The company operates 23 offices in Marin, Sonoma, San Francisco, Napa, and Alameda counties. Bank of Marin Bancorp was founded in 1989 and is headquartered in Novato, California.

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