Reviewing VersaBank (VBNK) & Its Rivals

VersaBank (NASDAQ:VBNK) is one of 920 public companies in the “Banks” industry, but how does it weigh in compared to its competitors? We will compare VersaBank to related companies based on the strength of its earnings, valuation, analyst recommendations, institutional ownership, profitability, risk and dividends.

Dividends

VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. VersaBank pays out 9.2% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.4% and pay out 28.9% of their earnings in the form of a dividend.

Institutional and Insider Ownership

56.9% of VersaBank shares are owned by institutional investors. Comparatively, 47.8% of shares of all “Banks” companies are owned by institutional investors. 5.3% of VersaBank shares are owned by insiders. Comparatively, 9.8% of shares of all “Banks” companies are owned 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.

Profitability

This table compares VersaBank and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VersaBank	9.92%	8.66%	0.75%
VersaBank Competitors	15.72%	9.53%	0.93%

Earnings & Valuation

This table compares VersaBank and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
VersaBank	$148.71 million	$20.32 million	28.57
VersaBank Competitors	$139.14 billion	$2.41 billion	16.82

VersaBank’s competitors have higher revenue and earnings than VersaBank. VersaBank is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and price targets for VersaBank and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VersaBank	0	1	3	0	2.75
VersaBank Competitors	7462	30177	27736	1456	2.35

VersaBank currently has a consensus target price of $24.00, indicating a potential upside of 10.55%. As a group, “Banks” companies have a potential upside of 15.95%. Given VersaBank’s competitors higher probable upside, analysts clearly believe VersaBank has less favorable growth aspects than its competitors.

Risk and Volatility

VersaBank has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, VersaBank’s competitors have a beta of 0.61, meaning that their average share price is 39% less volatile than the S&P 500.

Summary

VersaBank competitors beat VersaBank on 9 of the 15 factors compared.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.