Critical Analysis: Western New England Bancorp (NASDAQ:WNEB) & KBC Group (OTCMKTS:KBCSY)

KBC Group (OTCMKTS:KBCSY) and Western New England Bancorp (NASDAQ:WNEB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares KBC Group and Western New England Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KBC Group	$26.56 billion	2.18	$4.04 billion	$5.04	13.76
Western New England Bancorp	$86.58 million	3.39	$15.27 million	$0.89	16.37

KBC Group has higher revenue and earnings than Western New England Bancorp. KBC Group is trading at a lower price-to-earnings ratio than Western New England Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

KBC Group has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

67.9% of Western New England Bancorp shares are held by institutional investors. 6.6% of Western New England Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares KBC Group and Western New England Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KBC Group	14.98%	13.15%	0.92%
Western New England Bancorp	13.27%	7.25%	0.65%

Analyst Ratings

This is a breakdown of current ratings and price targets for KBC Group and Western New England Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KBC Group	1	4	1	0	2.00
Western New England Bancorp	0	2	2	0	2.50

Western New England Bancorp has a consensus target price of $15.00, indicating a potential upside of 2.96%. Given Western New England Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Western New England Bancorp is more favorable than KBC Group.

Dividends

KBC Group pays an annual dividend of $3.19 per share and has a dividend yield of 4.6%. Western New England Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.9%. KBC Group pays out 63.3% of its earnings in the form of a dividend. Western New England Bancorp pays out 31.5% 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.

Summary

Western New England Bancorp beats KBC Group on 9 of the 16 factors compared between the two stocks.

About KBC Group

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.

About Western New England Bancorp

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides a range of commercial and retail banking products and services to individuals and businesses. The company accepts various deposit accounts, including interest-bearing and noninterest-bearing checking, commercial checking, business, nonprofit and municipal checking, savings, money market and sweep, individual retirement, and other savings accounts; time deposits; certificates of deposit; and interest on lawyer's trust accounts. It also offers residential real estate loans, including first mortgages, home equity loans, and home equity lines, and secured by one-to-four family residential properties; commercial and industrial loans, such as letters of credit, revolving lines of credit, working capital, equipment financing, and term loans; commercial mortgage loans; construction and land development loans; home equity loans comprising home equity revolving loans and lines of credit; and consumer loans, including automobile, spa and pool, collateral, and personal lines of credit. In addition, the company provides automated teller machine (ATM), telephone and online banking, remote deposit capture, cash management, overdraft and safe deposit facility, and night deposit services. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. The company was founded in 1853 and is headquartered in Westfield, Massachusetts.