Head to Head Contrast: Wells Fargo & Company (NYSE:WFC) and OptimumBank (NASDAQ:OPHC)

OptimumBank (NASDAQ:OPHC) and Wells Fargo & Company (NYSE:WFC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Profitability

This table compares OptimumBank and Wells Fargo & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OptimumBank	19.62%	14.10%	1.31%
Wells Fargo & Company	15.73%	12.38%	1.04%

Analyst Recommendations

This is a summary of current ratings and price targets for OptimumBank and Wells Fargo & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	1	0	0	2.00
Wells Fargo & Company	0	6	11	2	2.79

OptimumBank currently has a consensus price target of $5.25, indicating a potential upside of 15.13%. Wells Fargo & Company has a consensus price target of $75.34, indicating a potential upside of 2.80%. Given OptimumBank’s higher probable upside, research analysts plainly believe OptimumBank is more favorable than Wells Fargo & Company.

Institutional & Insider Ownership

7.4% of OptimumBank shares are owned by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are owned by institutional investors. 13.9% of OptimumBank shares are owned by company insiders. Comparatively, 0.1% of Wells Fargo & Company shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

OptimumBank has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Earnings & Valuation

This table compares OptimumBank and Wells Fargo & Company”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OptimumBank	$40.98 million	1.31	$6.28 million	$1.32	3.45
Wells Fargo & Company	$81.58 billion	2.92	$19.72 billion	$5.57	13.16

Wells Fargo & Company has higher revenue and earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than Wells Fargo & Company, indicating that it is currently the more affordable of the two stocks.

Summary

Wells Fargo & Company beats OptimumBank on 10 of the 15 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.