WesBanco (NASDAQ:WSBC – Get Free Report) and Merchants Bancorp (NASDAQ:MBIN – Get Free Report) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
Insider & Institutional Ownership
61.4% of WesBanco shares are owned by institutional investors. Comparatively, 24.6% of Merchants Bancorp shares are owned by institutional investors. 2.1% of WesBanco shares are owned by insiders. Comparatively, 44.9% of Merchants Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Dividends
WesBanco pays an annual dividend of $1.52 per share and has a dividend yield of 4.1%. Merchants Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. WesBanco pays out 44.2% of its earnings in the form of a dividend. Merchants Bancorp pays out 8.8% 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. WesBanco has raised its dividend for 14 consecutive years and Merchants Bancorp has raised its dividend for 8 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| WesBanco | 23.35% | 9.72% | 1.34% |
| Merchants Bancorp | 19.80% | 15.29% | 1.34% |
Volatility and Risk
WesBanco has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.
Valuation & Earnings
This table compares WesBanco and Merchants Bancorp”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| WesBanco | $1.44 billion | 2.46 | $223.10 million | $3.44 | 10.74 |
| Merchants Bancorp | $709.19 million | 3.23 | $218.77 million | $4.98 | 10.00 |
WesBanco has higher revenue and earnings than Merchants Bancorp. Merchants Bancorp is trading at a lower price-to-earnings ratio than WesBanco, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and recommmendations for WesBanco and Merchants Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WesBanco | 0 | 5 | 2 | 0 | 2.29 |
| Merchants Bancorp | 0 | 3 | 2 | 0 | 2.40 |
WesBanco currently has a consensus target price of $43.60, suggesting a potential upside of 17.97%. Merchants Bancorp has a consensus target price of $55.25, suggesting a potential upside of 10.94%. Given WesBanco’s higher probable upside, research analysts plainly believe WesBanco is more favorable than Merchants Bancorp.
Summary
WesBanco beats Merchants Bancorp on 8 of the 15 factors compared between the two stocks.
About WesBanco
WesBanco, Inc. operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, mortgage banking, and insurance services to individuals and businesses in the United States. The company operates through two segments, Community Banking, and Trust and Investment Services. It offers commercial demand, individual demand, and time deposit accounts; commercial, mortgage and individual installment loans; retail loans, such as residential real estate mortgage loans, home equity lines of credit, and loans for other consumer purposes; installment loans to finance the purchase of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and various non-traditional offerings, such as insurance and securities brokerage services. The company also provides trust services; and various alternative investment products, including mutual funds and annuities. In addition, it acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. WesBanco, Inc. was founded in 1870 and is headquartered in Wheeling, West Virginia.
About Merchants Bancorp
Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.
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