Analyzing Washington Trust Bancorp (NASDAQ:WASH) & Potomac Bancshares (OTCMKTS:PTBS)

Washington Trust Bancorp (NASDAQ:WASH) and Potomac Bancshares (OTCMKTS:PTBS) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares Washington Trust Bancorp and Potomac Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$393.95 million	1.58	$52.24 million	$2.73	11.93
Potomac Bancshares	$54.90 million	1.86	$10.60 million	$2.36	9.64

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

Volatility & Risk

Washington Trust Bancorp has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Potomac Bancshares has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.

Profitability

This table compares Washington Trust Bancorp and Potomac Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	13.71%	9.79%	0.79%
Potomac Bancshares	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Washington Trust Bancorp and Potomac Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	1	2	1	0	2.00
Potomac Bancshares	0	0	0	0	0.00

Washington Trust Bancorp currently has a consensus price target of $33.00, suggesting a potential upside of 1.32%. Given Washington Trust Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe Washington Trust Bancorp is more favorable than Potomac Bancshares.

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.9%. Potomac Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.6%. Washington Trust Bancorp pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Potomac Bancshares pays out 25.4% of its earnings in the form of a dividend.

Institutional & Insider Ownership

65.8% of Washington Trust Bancorp shares are owned by institutional investors. Comparatively, 5.3% of Potomac Bancshares shares are owned by institutional investors. 1.3% of Washington Trust Bancorp shares are owned by company insiders. Comparatively, 4.4% of Potomac Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Washington Trust Bancorp beats Potomac Bancshares on 13 of the 16 factors compared between the two stocks.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

About Potomac Bancshares

Potomac Bancshares, Inc. operates as the bank holding company for Bank of Charles Town that provides various banking products and services to individuals and businesses. The company offers checking, savings, and individual retirement accounts; and certificates of deposit (CD). It also provides personal loans, including new and used vehicle, home equity, unsecured home improvement and personal, retail equipment, and lot loans, as well as loans secured by CD, and home equity lines of credit; commercial loans for building or office purchases, commercial real estate and construction, and production and administrative equipment purchases; lines of credit; mortgage, commercial, term, residential and commercial construction, commercial real estate, and agricultural loans; and credit and debit cards. In addition, the company offers Card Pay, cash management, merchant, financial planning, trust and estate, investment management, wealth management, full-service brokerage, retirement and insurance planning and products, asset allocation and management, and college planning services, as well as telephone, mobile, and online banking services. Potomac Bancshares, Inc. was founded in 1871 and is based in Charles Town, West Virginia.