Reviewing Old National Bancorp (NASDAQ:ONB) and Washington Trust Bancorp (NASDAQ:WASH)

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

Institutional & Insider Ownership

65.8% of Washington Trust Bancorp shares are held by institutional investors. Comparatively, 83.7% of Old National Bancorp shares are held by institutional investors. 1.3% of Washington Trust Bancorp shares are held by company insiders. Comparatively, 0.7% of Old National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Washington Trust Bancorp and Old National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	14.50%	10.18%	0.84%
Old National Bancorp	21.60%	11.80%	1.34%

Analyst Ratings

This is a summary of recent recommendations and price targets for Washington Trust Bancorp and Old National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	0	3	1	0	2.25
Old National Bancorp	0	3	10	0	2.77

Washington Trust Bancorp presently has a consensus price target of $35.50, indicating a potential downside of 11.23%. Old National Bancorp has a consensus price target of $29.75, indicating a potential upside of 15.94%. Given Old National Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Old National Bancorp is more favorable than Washington Trust Bancorp.

Valuation and Earnings

This table compares Washington Trust Bancorp and Old National Bancorp”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	1.94	$52.24 million	$2.88	13.89
Old National Bancorp	$2.82 billion	3.48	$669.26 million	$2.25	11.40

Old National Bancorp has higher revenue and earnings than Washington Trust Bancorp. Old National Bancorp 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.

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 5.6%. Old National Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 2.3%. Washington Trust Bancorp pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Old National Bancorp pays out 25.8% of its earnings in the form of a dividend.

Volatility & Risk

Washington Trust Bancorp has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Old National Bancorp has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

Old National Bancorp beats Washington Trust Bancorp on 12 of the 16 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 Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.