Bay Commercial Bank (NASDAQ:BCML) & WaFd (NASDAQ:WAFD) Critical Contrast

WaFd (NASDAQ:WAFD) and Bay Commercial Bank (NASDAQ:BCML) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.6%. Bay Commercial Bank pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. WaFd pays out 33.6% of its earnings in the form of a dividend. Bay Commercial Bank pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WaFd has increased its dividend for 2 consecutive years and Bay Commercial Bank has increased its dividend for 3 consecutive years. Bay Commercial Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares WaFd and Bay Commercial Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	18.04%	9.37%	0.93%
Bay Commercial Bank	6.53%	7.54%	0.98%

Volatility and Risk

WaFd has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Bay Commercial Bank has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for WaFd and Bay Commercial Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	0	1	2.40
Bay Commercial Bank	0	4	0	1	2.40

WaFd currently has a consensus price target of $32.50, indicating a potential upside of 9.17%. Bay Commercial Bank has a consensus price target of $34.00, indicating a potential upside of 9.68%. Given Bay Commercial Bank’s higher possible upside, analysts plainly believe Bay Commercial Bank is more favorable than WaFd.

Institutional and Insider Ownership

83.7% of WaFd shares are owned by institutional investors. Comparatively, 66.2% of Bay Commercial Bank shares are owned by institutional investors. 1.5% of WaFd shares are owned by insiders. Comparatively, 2.9% of Bay Commercial Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares WaFd and Bay Commercial Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$1.42 billion	1.55	$255.87 million	$3.21	9.27
Bay Commercial Bank	$141.48 million	2.39	$23.93 million	$0.84	36.90

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

Summary

WaFd beats Bay Commercial Bank on 8 of the 15 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.