Financial Survey: QCR (NASDAQ:QCRH) versus Wintrust Financial (NASDAQ:WTFC)

QCR (NASDAQ:QCRH) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Dividends

QCR pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Wintrust Financial pays an annual dividend of $2.20 per share and has a dividend yield of 1.5%. QCR pays out 5.0% of its earnings in the form of a dividend. Wintrust Financial pays out 18.4% 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. Wintrust Financial has raised its dividend for 12 consecutive years. Wintrust Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

70.0% of QCR shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 3.2% of QCR shares are held by insiders. Comparatively, 1.2% of Wintrust Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares QCR and Wintrust Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$603.75 million	2.39	$127.19 million	$7.98	10.97
Wintrust Financial	$4.23 billion	2.31	$823.84 million	$11.93	12.12

Wintrust Financial has higher revenue and earnings than QCR. QCR is trading at a lower price-to-earnings ratio than Wintrust Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for QCR and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	2	4	0	2.67
Wintrust Financial	0	2	10	1	2.92

QCR presently has a consensus price target of $101.00, indicating a potential upside of 15.32%. Wintrust Financial has a consensus price target of $168.92, indicating a potential upside of 16.83%. Given Wintrust Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Wintrust Financial is more favorable than QCR.

Profitability

This table compares QCR and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QCR	21.98%	12.54%	1.44%
Wintrust Financial	20.11%	13.15%	1.25%

Risk and Volatility

QCR has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Summary

Wintrust Financial beats QCR on 13 of the 18 factors compared between the two stocks.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company’s deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company’s loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.