Head-To-Head Analysis: Columbia Banking System (NASDAQ:COLB) vs. FS Bancorp (NASDAQ:FSBW)

Columbia Banking System (NASDAQ:COLB) and FS Bancorp (NASDAQ:FSBW) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Profitability

This table compares Columbia Banking System and FS Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	19.28%	11.41%	1.30%
FS Bancorp	14.91%	10.99%	1.04%

Risk & Volatility

Columbia Banking System has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Institutional & Insider Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 63.9% of FS Bancorp shares are owned by institutional investors. 0.6% of Columbia Banking System shares are owned by insiders. Comparatively, 12.9% of FS Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.0%. FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.8%. Columbia Banking System pays out 59.0% of its earnings in the form of a dividend. FS Bancorp pays out 27.0% 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. Columbia Banking System has increased its dividend for 4 consecutive years and FS Bancorp has increased its dividend for 12 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Columbia Banking System and FS Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	10	4	1	2.40
FS Bancorp	0	1	1	0	2.50

Columbia Banking System currently has a consensus price target of $31.73, suggesting a potential upside of 7.34%. FS Bancorp has a consensus price target of $46.00, suggesting a potential upside of 12.77%. Given FS Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe FS Bancorp is more favorable than Columbia Banking System.

Valuation and Earnings

This table compares Columbia Banking System and FS Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$3.21 billion	2.67	$550.00 million	$2.51	11.78
FS Bancorp	$219.52 million	1.39	$33.35 million	$4.29	9.51

Columbia Banking System has higher revenue and earnings than FS Bancorp. FS Bancorp is trading at a lower price-to-earnings ratio than Columbia Banking System, indicating that it is currently the more affordable of the two stocks.

Summary

Columbia Banking System beats FS Bancorp on 11 of the 18 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.