Trustmark (NASDAQ:TRMK) versus Waterstone Financial (NASDAQ:WSBF) Financial Contrast

Waterstone Financial (NASDAQ:WSBF) and Trustmark (NASDAQ:TRMK) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Waterstone Financial and Trustmark, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterstone Financial	0	0	1	0	3.00
Trustmark	0	5	1	1	2.43

Trustmark has a consensus target price of $47.38, suggesting a potential upside of 1.42%. Given Trustmark’s higher probable upside, analysts clearly believe Trustmark is more favorable than Waterstone Financial.

Dividends

Waterstone Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.3%. Trustmark pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Waterstone Financial pays out 39.5% of its earnings in the form of a dividend. Trustmark pays out 25.4% 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. Trustmark has increased its dividend for 1 consecutive years.

Profitability

This table compares Waterstone Financial and Trustmark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterstone Financial	14.57%	8.64%	1.33%
Trustmark	20.75%	10.69%	1.20%

Volatility and Risk

Waterstone Financial has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Trustmark has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Earnings & Valuation

This table compares Waterstone Financial and Trustmark”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterstone Financial	$147.05 million	2.50	$26.40 million	$1.72	11.90
Trustmark	$1.12 billion	2.41	$224.13 million	$3.94	11.86

Trustmark has higher revenue and earnings than Waterstone Financial. Trustmark is trading at a lower price-to-earnings ratio than Waterstone Financial, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

62.7% of Waterstone Financial shares are owned by institutional investors. Comparatively, 67.6% of Trustmark shares are owned by institutional investors. 6.0% of Waterstone Financial shares are owned by company insiders. Comparatively, 1.7% of Trustmark shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Trustmark beats Waterstone Financial on 10 of the 17 factors compared between the two stocks.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.

About Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company operates through three segments: General Banking, Wealth Management, and Insurance. It offers checking, savings, and money market accounts; certificates of deposits and individual retirement accounts; financing for commercial and industrial projects, income-producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit, as well as treasury management services. The company also provides mortgage banking services, including construction financing, production of conventional and government-insured mortgages, and secondary marketing and mortgage servicing. In addition, it provides wealth management and trust services, such as administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. Further, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.