Analyzing Westamerica Bancorporation (NASDAQ:WABC) & Community Financial System (NYSE:CBU)

Community Financial System (NYSE:CBU) and Westamerica Bancorporation (NASDAQ:WABC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Earnings & Valuation

This table compares Community Financial System and Westamerica Bancorporation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Financial System	$1.01 billion	3.34	$210.46 million	$4.43	14.54
Westamerica Bancorporation	$271.77 million	5.07	$116.17 million	$4.64	12.85

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

Profitability

This table compares Community Financial System and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Financial System	22.05%	11.78%	1.36%
Westamerica Bancorporation	41.63%	12.80%	1.89%

Dividends

Community Financial System pays an annual dividend of $1.96 per share and has a dividend yield of 3.0%. Westamerica Bancorporation pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. Community Financial System pays out 44.2% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 41.4% 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. Community Financial System has raised its dividend for 33 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Community Financial System and Westamerica Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Financial System	0	4	1	1	2.50
Westamerica Bancorporation	0	1	1	0	2.50

Community Financial System presently has a consensus target price of $69.25, indicating a potential upside of 7.49%. Westamerica Bancorporation has a consensus target price of $65.00, indicating a potential upside of 8.99%. Given Westamerica Bancorporation’s higher possible upside, analysts plainly believe Westamerica Bancorporation is more favorable than Community Financial System.

Institutional and Insider Ownership

73.8% of Community Financial System shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 1.1% of Community Financial System shares are held by insiders. Comparatively, 5.9% of Westamerica Bancorporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Community Financial System has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Summary

Westamerica Bancorporation beats Community Financial System on 11 of the 16 factors compared between the two stocks.

About Community Financial System

Community Financial System, Inc. is a diversified financial services company headquartered in DeWitt, New York. Its principal subsidiary, Community Bank, N.A., provides personal and business banking services, including deposit accounts, lending, and cash management. The company also offers retirement plan administration and employee benefits services, insurance brokerage, and wealth management and investment advisory services through its specialized subsidiaries. Through its banking network, Community Financial System serves customers in New York, Pennsylvania, Vermont, and Massachusetts.

About Westamerica Bancorporation

Westamerica Bancorporation is a bank holding company headquartered in San Rafael, California. Its principal subsidiary, Westamerica Bank, provides banking services to individuals, businesses and public entities. The bank offers deposit accounts, certificates of deposit, commercial and consumer loans, and digital banking services. It also provides businesses with cash-management and other banking services. Westamerica Bank serves communities in Northern and Central California, including the San Francisco Bay Area and the Sacramento and Central Valleys.