Analyzing Washington Trust Bancorp (NASDAQ:WASH) & Union Bankshares (NASDAQ:UNB)

Washington Trust Bancorp (NASDAQ:WASH) and Union Bankshares (NASDAQ:UNB) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

65.8% of Washington Trust Bancorp shares are held by institutional investors. Comparatively, 14.8% of Union Bankshares shares are held by institutional investors. 1.3% of Washington Trust Bancorp shares are held by company insiders. Comparatively, 1.8% of Union Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Washington Trust Bancorp and Union Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	0	5	0	0	2.00
Union Bankshares	0	1	0	0	2.00

Washington Trust Bancorp currently has a consensus price target of $31.33, indicating a potential downside of 12.89%. Given Washington Trust Bancorp’s higher probable upside, research analysts clearly believe Washington Trust Bancorp is more favorable than Union Bankshares.

Profitability

This table compares Washington Trust Bancorp and Union Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	13.26%	9.75%	0.78%
Union Bankshares	12.75%	14.78%	0.72%

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.2%. Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.8%. Washington Trust Bancorp pays out 83.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Union Bankshares pays out 59.3% of its earnings in the form of a dividend.

Volatility and Risk

Washington Trust Bancorp has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Earnings and Valuation

This table compares Washington Trust Bancorp and Union Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$393.95 million	1.74	$52.24 million	$2.70	13.32
Union Bankshares	$86.06 million	1.32	$11.08 million	$2.43	10.16

Washington Trust Bancorp has higher revenue and earnings than Union Bankshares. Union Bankshares is trading at a lower price-to-earnings ratio than Washington Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Washington Trust Bancorp beats Union Bankshares on 11 of the 14 factors compared between the two stocks.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.