Waterstone Financial (NASDAQ:WSBF) & ServisFirst Bancshares (NYSE:SFBS) Head-To-Head Survey

Waterstone Financial (NASDAQ:WSBF) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Earnings & Valuation

This table compares Waterstone Financial and ServisFirst Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterstone Financial	$202.47 million	1.47	$18.69 million	$1.33	12.14
ServisFirst Bancshares	$981.18 million	4.00	$227.24 million	$4.67	15.40

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

Volatility and Risk

Waterstone Financial has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Dividends

Waterstone Financial pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.9%. Waterstone Financial pays out 45.1% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 28.7% 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. ServisFirst Bancshares has increased its dividend for 10 consecutive years.

Institutional and Insider Ownership

62.7% of Waterstone Financial shares are held by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are held by institutional investors. 8.3% of Waterstone Financial shares are held by insiders. Comparatively, 6.7% of ServisFirst Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Waterstone Financial and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterstone Financial	12.08%	6.99%	1.07%
ServisFirst Bancshares	25.24%	15.67%	1.50%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Waterstone Financial and ServisFirst Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterstone Financial	0	0	1	0	3.00
ServisFirst Bancshares	1	3	1	0	2.00

ServisFirst Bancshares has a consensus price target of $86.67, indicating a potential upside of 20.48%. Given ServisFirst Bancshares’ higher possible upside, analysts plainly believe ServisFirst Bancshares is more favorable than Waterstone Financial.

Summary

ServisFirst Bancshares beats Waterstone Financial on 13 of the 16 factors compared between the two stocks.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.