FS Bancorp (NASDAQ:FSBW) vs. WaFd (NASDAQ:WAFD) Financial Review

WaFd (NASDAQ:WAFD) and FS Bancorp (NASDAQ:FSBW) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Profitability

This table compares WaFd and FS Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	16.02%	8.40%	0.84%
FS Bancorp	15.10%	10.84%	1.04%

Insider & Institutional Ownership

83.7% of WaFd shares are owned by institutional investors. Comparatively, 63.9% of FS Bancorp shares are owned by institutional investors. 1.5% of WaFd shares are owned by insiders. Comparatively, 12.7% of FS Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares WaFd and FS Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$1.41 billion	1.76	$226.07 million	$2.64	12.30
FS Bancorp	$206.39 million	1.51	$35.02 million	$4.10	10.09

WaFd has higher revenue and earnings than FS Bancorp. FS Bancorp is trading at a lower price-to-earnings ratio than WaFd, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

WaFd has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.3%. FS Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. WaFd pays out 40.9% of its earnings in the form of a dividend. FS Bancorp pays out 27.3% 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. WaFd has increased its dividend for 2 consecutive years and FS Bancorp has increased its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for WaFd and FS Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	5	0	0	2.00
FS Bancorp	0	1	1	0	2.50

WaFd presently has a consensus target price of $32.00, suggesting a potential downside of 1.45%. FS Bancorp has a consensus target price of $41.00, suggesting a potential downside of 0.87%. Given FS Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe FS Bancorp is more favorable than WaFd.

Summary

FS Bancorp beats WaFd on 9 of the 17 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.