Analyzing Western Alliance Bancorporation (NYSE:WAL) & Westamerica Bancorporation (NASDAQ:WABC)

Western Alliance Bancorporation (NYSE:WAL) and Westamerica Bancorporation (NASDAQ:WABC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Insider and Institutional Ownership

79.2% of Western Alliance Bancorporation shares are owned by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are owned by institutional investors. 2.8% of Western Alliance Bancorporation shares are owned by company insiders. Comparatively, 5.9% of Westamerica Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Western Alliance Bancorporation and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Alliance Bancorporation	17.03%	13.58%	1.09%
Westamerica Bancorporation	42.08%	12.26%	1.91%

Dividends

Western Alliance Bancorporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Westamerica Bancorporation pays an annual dividend of $1.92 per share and has a dividend yield of 3.6%. Western Alliance Bancorporation pays out 19.6% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 42.8% 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. Western Alliance Bancorporation has raised its dividend for 5 consecutive years and Westamerica Bancorporation has raised its dividend for 34 consecutive years. Westamerica Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Western Alliance Bancorporation has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Western Alliance Bancorporation and Westamerica Bancorporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Alliance Bancorporation	0	5	9	0	2.64
Westamerica Bancorporation	0	1	1	0	2.50

Western Alliance Bancorporation presently has a consensus price target of $93.14, indicating a potential upside of 20.02%. Westamerica Bancorporation has a consensus price target of $58.00, indicating a potential upside of 7.49%. Given Western Alliance Bancorporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Western Alliance Bancorporation is more favorable than Westamerica Bancorporation.

Earnings and Valuation

This table compares Western Alliance Bancorporation and Westamerica Bancorporation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Alliance Bancorporation	$3.71 billion	2.27	$969.00 million	$8.59	9.03
Westamerica Bancorporation	$271.77 million	4.66	$116.17 million	$4.49	12.02

Western Alliance Bancorporation has higher revenue and earnings than Westamerica Bancorporation. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than Westamerica Bancorporation, indicating that it is currently the more affordable of the two stocks.

Summary

Western Alliance Bancorporation beats Westamerica Bancorporation on 9 of the 17 factors compared between the two stocks.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.