Analyzing WesBanco (WSBC) and Community Bank System (CBU)

WesBanco (NASDAQ: WSBC) and Community Bank System (NYSE:CBU) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Earnings & Valuation

This table compares WesBanco and Community Bank System’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
WesBanco $367.60 million 4.65 $86.63 million $2.34 16.60
Community Bank System $441.14 million 5.89 $103.81 million $2.19 23.46

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

Dividends

WesBanco pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. Community Bank System pays an annual dividend of $1.36 per share and has a dividend yield of 2.6%. WesBanco pays out 44.4% of its earnings in the form of a dividend. Community Bank System pays out 62.1% 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. Community Bank System has raised its dividend for 6 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for WesBanco and Community Bank System, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WesBanco 0 5 2 0 2.29
Community Bank System 1 4 0 0 1.80

WesBanco currently has a consensus target price of $42.00, indicating a potential upside of 8.11%. Community Bank System has a consensus target price of $54.00, indicating a potential upside of 5.10%. Given WesBanco’s stronger consensus rating and higher possible upside, equities analysts plainly believe WesBanco is more favorable than Community Bank System.

Profitability

This table compares WesBanco and Community Bank System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WesBanco 24.73% 7.66% 1.07%
Community Bank System 21.00% 9.22% 1.33%

Insider & Institutional Ownership

57.8% of WesBanco shares are owned by institutional investors. Comparatively, 69.1% of Community Bank System shares are owned by institutional investors. 4.1% of WesBanco shares are owned by insiders. Comparatively, 3.2% of Community Bank System shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

WesBanco has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Community Bank System has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Summary

Community Bank System beats WesBanco on 9 of the 17 factors compared between the two stocks.

About WesBanco

WesBanco, Inc. (WesBanco) is a bank holding company. The Company offers a range of financial services, including retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. WesBanco offers its services through two segments: community banking, which offers services, such as commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and trust and investment services, which offers trust services, as well as various alternative investment products, including mutual funds. The Community Banking segment also offers insurance and securities brokerage services, among others. As of December 31, 2016, WesBanco operated one commercial bank, WesBanco Bank, Inc. through 174 branches and 163 automated teller machines (ATMs) located in West Virginia, Ohio, western Pennsylvania, Kentucky and southern Indiana.

About Community Bank System

Community Bank System, Inc. is a bank holding company. The Company owns two subsidiaries: Community Bank, N.A. (CBNA or the Bank) and Benefit Plans Administrative Services, Inc. (BPAS). It operates in three segments: banking, employee benefit services, and All Other. The Banking segment provides lending and depository-related products and services to individuals, businesses and municipal enterprises. The Employee benefit services segment, consisting of BPAS and its subsidiaries, provides employee benefit trust services; collective investment fund; actuarial services, and healthcare consulting services. The All Other segment consists of wealth management services, including trust services provided by the personal trust unit within the Bank, broker-dealer and investment advisory services provided by Community Investment Services, Inc. (CISI), Oneida Wealth Management, Inc. (OWM) and The Carta Group, Inc, and asset management provided by Nottingham Advisors, Inc.

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