ServisFirst Bancshares (NYSE:SFBS – Get Free Report) and Waterstone Financial (NASDAQ:WSBF – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Valuation & Earnings
This table compares ServisFirst Bancshares and Waterstone Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ServisFirst Bancshares | $981.18 million | 4.00 | $227.24 million | $4.67 | 15.40 |
| Waterstone Financial | $202.47 million | 1.47 | $18.69 million | $1.33 | 12.14 |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for ServisFirst Bancshares and Waterstone Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ServisFirst Bancshares | 1 | 3 | 1 | 0 | 2.00 |
| Waterstone Financial | 0 | 0 | 1 | 0 | 3.00 |
ServisFirst Bancshares currently has a consensus price target of $86.67, suggesting a potential upside of 20.48%. Given ServisFirst Bancshares’ higher probable upside, equities analysts plainly believe ServisFirst Bancshares is more favorable than Waterstone Financial.
Dividends
ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.9%. Waterstone Financial pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. ServisFirst Bancshares pays out 28.7% of its earnings in the form of a dividend. Waterstone Financial pays out 45.1% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years.
Profitability
This table compares ServisFirst Bancshares and Waterstone Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ServisFirst Bancshares | 25.24% | 15.67% | 1.50% |
| Waterstone Financial | 12.08% | 6.99% | 1.07% |
Institutional and Insider Ownership
67.3% of ServisFirst Bancshares shares are held by institutional investors. Comparatively, 62.7% of Waterstone Financial shares are held by institutional investors. 6.7% of ServisFirst Bancshares shares are held by insiders. Comparatively, 8.3% of Waterstone Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
ServisFirst Bancshares has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.
Summary
ServisFirst Bancshares beats Waterstone Financial on 13 of the 16 factors compared between the two stocks.
About ServisFirst Bancshares
ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.
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.
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