West Bancorporation (NASDAQ:WTBA) and Timberland Bancorp (NASDAQ:TSBK) Head-To-Head Comparison

Timberland Bancorp (NASDAQ:TSBK) and West Bancorporation (NASDAQ:WTBA) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current recommendations for Timberland Bancorp and West Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	1	0	3.00
West Bancorporation	0	3	0	0	2.00

West Bancorporation has a consensus price target of $24.00, suggesting a potential downside of 6.03%. Given West Bancorporation’s higher probable upside, analysts clearly believe West Bancorporation is more favorable than Timberland Bancorp.

Valuation and Earnings

This table compares Timberland Bancorp and West Bancorporation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$114.63 million	2.69	$29.16 million	$3.86	10.13
West Bancorporation	$202.45 million	2.14	$32.56 million	$1.91	13.37

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

Volatility & Risk

Timberland Bancorp has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

65.5% of Timberland Bancorp shares are owned by institutional investors. Comparatively, 44.3% of West Bancorporation shares are owned by institutional investors. 3.6% of Timberland Bancorp shares are owned by company insiders. Comparatively, 4.6% of West Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Timberland Bancorp and West Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	26.17%	11.86%	1.55%
West Bancorporation	16.08%	14.59%	0.89%

Dividends

Timberland Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 3.9%. Timberland Bancorp pays out 29.0% of its earnings in the form of a dividend. West Bancorporation pays out 52.4% 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. Timberland Bancorp has increased its dividend for 13 consecutive years.

Summary

Timberland Bancorp beats West Bancorporation on 9 of the 17 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.