Western Alliance Bancorporation (NYSE:WAL – Get Free Report) and Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.
Risk and Volatility
Western Alliance Bancorporation has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.
Earnings and Valuation
This table compares Western Alliance Bancorporation and Enterprise Financial Services”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Western Alliance Bancorporation | $3.94 billion | 2.10 | $969.00 million | $9.05 | 8.39 |
| Enterprise Financial Services | $640.13 million | 3.53 | $201.37 million | $4.98 | 12.54 |
Western Alliance Bancorporation has higher revenue and earnings than Enterprise Financial Services. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than Enterprise Financial Services, indicating that it is currently the more affordable of the two stocks.
Dividends
Western Alliance Bancorporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Enterprise Financial Services pays an annual dividend of $1.44 per share and has a dividend yield of 2.3%. Western Alliance Bancorporation pays out 18.6% of its earnings in the form of a dividend. Enterprise Financial Services pays out 28.9% 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. Western Alliance Bancorporation has raised its dividend for 5 consecutive years and Enterprise Financial Services has raised its dividend for 11 consecutive years. Enterprise Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
79.2% of Western Alliance Bancorporation shares are owned by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are owned by institutional investors. 2.8% of Western Alliance Bancorporation shares are owned by insiders. Comparatively, 2.2% of Enterprise Financial Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Western Alliance Bancorporation and Enterprise Financial Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Western Alliance Bancorporation | 17.34% | 13.50% | 1.07% |
| Enterprise Financial Services | 18.83% | 9.52% | 1.08% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Western Alliance Bancorporation and Enterprise Financial Services, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Western Alliance Bancorporation | 0 | 5 | 11 | 0 | 2.69 |
| Enterprise Financial Services | 0 | 1 | 5 | 1 | 3.00 |
Western Alliance Bancorporation currently has a consensus target price of $92.18, indicating a potential upside of 21.46%. Enterprise Financial Services has a consensus target price of $69.20, indicating a potential upside of 10.84%. Given Western Alliance Bancorporation’s higher probable upside, equities research analysts plainly believe Western Alliance Bancorporation is more favorable than Enterprise Financial Services.
Summary
Western Alliance Bancorporation beats Enterprise Financial Services on 10 of the 18 factors compared between the two stocks.
About Western Alliance Bancorporation
Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.
About Enterprise Financial Services
Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
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