Head to Head Analysis: Westamerica Bancorporation (NASDAQ:WABC) vs. Erste Group Bank (OTCMKTS:EBKDY)

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

Valuation & Earnings

This table compares Erste Group Bank and Westamerica Bancorporation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Erste Group Bank	$23.77 billion	2.31	$3.97 billion	$5.22	13.54
Westamerica Bancorporation	$251.90 million	5.53	$116.17 million	$4.54	13.29

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

Volatility & Risk

Erste Group Bank 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 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Profitability

This table compares Erste Group Bank and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Erste Group Bank	18.39%	10.22%	0.94%
Westamerica Bancorporation	41.71%	12.31%	1.88%

Analyst Ratings

This is a summary of current recommendations and price targets for Erste Group Bank and Westamerica Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Erste Group Bank	0	1	5	1	3.00
Westamerica Bancorporation	0	2	0	0	2.00

Westamerica Bancorporation has a consensus target price of $64.00, suggesting a potential upside of 6.10%. Given Westamerica Bancorporation’s higher possible upside, analysts clearly believe Westamerica Bancorporation is more favorable than Erste Group Bank.

Institutional & Insider Ownership

0.4% of Erste Group Bank shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 5.9% of Westamerica Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Erste Group Bank pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Westamerica Bancorporation pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. Erste Group Bank pays out 5.2% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 42.3% 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. Westamerica Bancorporation has raised its dividend for 34 consecutive years. Westamerica Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Erste Group Bank

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, and public sector customers. The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments. It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products. The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, cash logistics, and payment factory and cash pooling services; documentary collection, equity interests and investments, revolving export credits lines, letters of credit, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services. In addition, it provides cash management, trade finance, customer referral, markets execution, debt capital markets, and custody and brokerage services. Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans. It operates in Austria, the Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, and internationally. The company was founded in 1819 and is headquartered in Vienna, Austria.

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.