Wintrust Financial (NASDAQ:WTFC) & Enterprise Financial Services (NASDAQ:EFSC) Financial Contrast

Enterprise Financial Services (NASDAQ:EFSC) and Wintrust Financial (NASDAQ:WTFC) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are owned by institutional investors. 2.3% of Enterprise Financial Services shares are owned by company insiders. Comparatively, 1.0% of Wintrust Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Enterprise Financial Services and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Financial Services	0	1	3	0	2.75
Wintrust Financial	0	2	11	1	2.93

Enterprise Financial Services currently has a consensus price target of $65.00, indicating a potential upside of 17.39%. Wintrust Financial has a consensus price target of $152.92, indicating a potential upside of 18.50%. Given Wintrust Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Wintrust Financial is more favorable than Enterprise Financial Services.

Profitability

This table compares Enterprise Financial Services and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Financial Services	21.28%	11.19%	1.29%
Wintrust Financial	18.85%	13.05%	1.21%

Valuation & Earnings

This table compares Enterprise Financial Services and Wintrust Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Financial Services	$920.75 million	2.22	$185.27 million	$5.27	10.51
Wintrust Financial	$3.97 billion	2.18	$695.04 million	$10.88	11.86

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

Dividends

Enterprise Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Enterprise Financial Services pays out 23.5% of its earnings in the form of a dividend. Wintrust Financial pays out 18.4% 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. Enterprise Financial Services has increased its dividend for 11 consecutive years and Wintrust Financial has increased its dividend for 12 consecutive years.

Risk & Volatility

Enterprise Financial Services has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

Wintrust Financial beats Enterprise Financial Services on 12 of the 18 factors compared between the two stocks.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.