Head-To-Head Comparison: Washington Trust Bancorp (NASDAQ:WASH) and Business First Bancshares (NASDAQ:BFST)

Washington Trust Bancorp (NASDAQ:WASH) and Business First Bancshares (NASDAQ:BFST) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Volatility and Risk

Washington Trust Bancorp has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Business First Bancshares has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Valuation and Earnings

This table compares Washington Trust Bancorp and Business First Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$393.95 million	1.90	$52.24 million	$3.33	11.79
Business First Bancshares	$516.55 million	2.01	$87.86 million	$2.82	11.29

Business First Bancshares has higher revenue and earnings than Washington Trust Bancorp. Business First Bancshares is trading at a lower price-to-earnings ratio than Washington Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Washington Trust Bancorp and Business First Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	0	2	1	1	2.75
Business First Bancshares	0	0	5	0	3.00

Washington Trust Bancorp currently has a consensus price target of $37.00, indicating a potential downside of 5.76%. Business First Bancshares has a consensus price target of $34.75, indicating a potential upside of 9.13%. Given Business First Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Business First Bancshares is more favorable than Washington Trust Bancorp.

Profitability

This table compares Washington Trust Bancorp and Business First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	16.73%	11.67%	0.98%
Business First Bancshares	17.07%	11.03%	1.13%

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 5.7%. Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Washington Trust Bancorp pays out 67.3% of its earnings in the form of a dividend. Business First Bancshares pays out 21.3% 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. Business First Bancshares has raised its dividend for 2 consecutive years.

Institutional and Insider Ownership

65.8% of Washington Trust Bancorp shares are held by institutional investors. Comparatively, 47.4% of Business First Bancshares shares are held by institutional investors. 1.3% of Washington Trust Bancorp shares are held by insiders. Comparatively, 5.7% of Business First Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Business First Bancshares beats Washington Trust Bancorp on 12 of the 18 factors compared between the two stocks.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.