Financial Contrast: Bank of Marin Bancorp (NASDAQ:BMRC) versus Westamerica Bancorporation (NASDAQ:WABC)

Bank of Marin Bancorp (NASDAQ:BMRC) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Bank of Marin Bancorp and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Marin Bancorp	6.22%	5.25%	0.61%
Westamerica Bancorporation	43.19%	13.10%	2.02%

Dividends

Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.9%. Westamerica Bancorporation pays an annual dividend of $1.84 per share and has a dividend yield of 3.8%. Bank of Marin Bancorp pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westamerica Bancorporation pays out 40.1% of its earnings in the form of a dividend. Westamerica Bancorporation has increased its dividend for 34 consecutive years.

Earnings and Valuation

This table compares Bank of Marin Bancorp and Westamerica Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Marin Bancorp	$93.05 million	4.46	-$8.41 million	$0.62	41.60
Westamerica Bancorporation	$311.17 million	3.83	$138.64 million	$4.59	10.42

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

Insider and Institutional Ownership

52.3% of Bank of Marin Bancorp shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 5.1% of Bank of Marin Bancorp shares are held by company insiders. Comparatively, 5.3% of Westamerica Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Bank of Marin Bancorp and Westamerica Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Marin Bancorp	0	2	3	1	2.83
Westamerica Bancorporation	0	3	0	0	2.00

Bank of Marin Bancorp currently has a consensus price target of $28.40, indicating a potential upside of 10.12%. Westamerica Bancorporation has a consensus price target of $52.00, indicating a potential upside of 8.72%. Given Bank of Marin Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe Bank of Marin Bancorp is more favorable than Westamerica Bancorporation.

Risk and Volatility

Bank of Marin Bancorp has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

Westamerica Bancorporation beats Bank of Marin Bancorp on 10 of the 18 factors compared between the two stocks.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.

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.