West Bancorporation (NASDAQ:WTBA) versus Broadway Financial (NASDAQ:BYFC) Head-To-Head Comparison

West Bancorporation (NASDAQ:WTBA) and Broadway Financial (NASDAQ:BYFC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Institutional & Insider Ownership

44.3% of West Bancorporation shares are held by institutional investors. Comparatively, 12.1% of Broadway Financial shares are held by institutional investors. 4.6% of West Bancorporation shares are held by company insiders. Comparatively, 3.0% of Broadway Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares West Bancorporation and Broadway Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Bancorporation	17.30%	14.88%	0.95%
Broadway Financial	-31.80%	3.01%	0.27%

Volatility and Risk

West Bancorporation has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Broadway Financial has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for West Bancorporation and Broadway Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Bancorporation	0	3	1	0	2.25
Broadway Financial	1	0	0	0	1.00

West Bancorporation presently has a consensus target price of $26.25, suggesting a potential downside of 2.65%. Given West Bancorporation’s stronger consensus rating and higher probable upside, analysts clearly believe West Bancorporation is more favorable than Broadway Financial.

Earnings and Valuation

This table compares West Bancorporation and Broadway Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Bancorporation	$202.45 million	2.27	$32.56 million	$2.06	13.09
Broadway Financial	$63.03 million	1.41	-$24.80 million	($2.75)	-3.49

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

Summary

West Bancorporation beats Broadway Financial on 13 of the 14 factors compared between the two stocks.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.

About Broadway Financial

Broadway Financial Corporation operates as the holding company for City First Bank, National Association that provides various banking products and services in the United States. It accepts various deposit accounts, including savings accounts, checking accounts, interest checking accounts, money market accounts, and fixed-term certificates of deposit. The company also offers mortgage loans, which are secured by multi-family residential properties; single family residential properties; and commercial real estate, including charter schools, community facilities, and churches, as well as commercial business, construction, and consumer loans. In addition, it invests in securities issued by federal government agencies, residential mortgage-backed securities, and other investments. The company was founded in 1946 and is headquartered in Los Angeles, California.