Critical Survey: West Bancorporation (NASDAQ:WTBA) vs. Suruga Bank (OTCMKTS:SUGBY)

West Bancorporation (NASDAQ:WTBA) and Suruga Bank (OTCMKTS:SUGBY) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Earnings and Valuation

This table compares West Bancorporation and Suruga Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Bancorporation	$202.45 million	2.07	$32.56 million	$2.06	11.92
Suruga Bank	$730.15 million	2.16	$230.70 million	$13.12	6.10

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

Dividends

West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Suruga Bank pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. West Bancorporation pays out 48.5% of its earnings in the form of a dividend. Suruga Bank pays out 7.9% 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.

Profitability

This table compares West Bancorporation and Suruga Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Bancorporation	17.30%	14.88%	0.95%
Suruga Bank	33.98%	11.31%	0.99%

Analyst Ratings

This is a breakdown of recent ratings and price targets for West Bancorporation and Suruga Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Bancorporation	0	3	1	0	2.25
Suruga Bank	0	0	0	0	0.00

West Bancorporation presently has a consensus target price of $24.75, indicating a potential upside of 0.80%. Given West Bancorporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe West Bancorporation is more favorable than Suruga Bank.

Insider & Institutional Ownership

44.3% of West Bancorporation shares are held by institutional investors. 4.6% of West Bancorporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

West Bancorporation has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Suruga Bank has a beta of -0.06, meaning that its share price is 106% less volatile than the S&P 500.

Summary

West Bancorporation beats Suruga Bank on 9 of the 16 factors compared between the two stocks.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.