WesBanco (NASDAQ:WSBC) and Severn Bancorp (NASDAQ:SVBI) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for WesBanco and Severn Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WesBanco 0 3 0 0 2.00
Severn Bancorp 0 0 0 0 N/A

WesBanco currently has a consensus target price of $46.50, suggesting a potential upside of 30.84%. Given WesBanco’s higher possible upside, equities research analysts clearly believe WesBanco is more favorable than Severn Bancorp.

Profitability

This table compares WesBanco and Severn Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WesBanco 27.17% 8.92% 1.37%
Severn Bancorp 19.16% 9.55% 1.04%

Risk & Volatility

WesBanco has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Severn Bancorp has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares WesBanco and Severn Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WesBanco $515.23 million 3.77 $143.11 million $3.21 11.07
Severn Bancorp $46.44 million 2.35 $8.57 million N/A N/A

WesBanco has higher revenue and earnings than Severn Bancorp.

Institutional and Insider Ownership

57.5% of WesBanco shares are held by institutional investors. Comparatively, 18.8% of Severn Bancorp shares are held by institutional investors. 3.2% of WesBanco shares are held by insiders. Comparatively, 24.5% of Severn Bancorp shares are held by 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

WesBanco pays an annual dividend of $1.24 per share and has a dividend yield of 3.5%. Severn Bancorp pays an annual dividend of $0.12 per share and has a dividend yield of 1.4%. WesBanco pays out 38.6% of its earnings in the form of a dividend. WesBanco has increased its dividend for 8 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

WesBanco beats Severn Bancorp on 10 of the 14 factors compared between the two stocks.

WesBanco Company Profile

WesBanco, Inc. operates as the holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, and mortgage banking and insurance services in the United States. It operates in two segments, Community Banking, and Trust and Investment Services. The company offers commercial demand, individual demand, and time deposit accounts; money market accounts; interest bearing and non-interest bearing demand deposits, as well as savings deposits; and certificates of deposit. It also provides commercial real estate loans; commercial and industrial loans; residential real estate loans, including loans to purchase, construct, or refinance borrower's home; home equity lines of credit; installment loans to finance the purchases 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 commercial, mortgage, and individual installment loans. In addition, the company offers trust and investment services, as well as various investment products comprising mutual funds and annuities; and securities brokerage services. Further, WesBanco, Inc., through its non-banking subsidiaries, 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. As of December 31, 2018, the company operated through 209 branches and 202 ATMs in West Virginia, Ohio, western Pennsylvania, Kentucky, and southern Indiana, as well as 4 loan production offices in West Virginia, Ohio, and western Pennsylvania. WesBanco, Inc. was founded in 1870 and is headquartered in Wheeling, West Virginia.

Severn Bancorp Company Profile

Severn Bancorp, Inc. operates as the holding company for Severn Savings Bank, FSB that provides a range of personal and commercial banking products and services in Maryland, Delaware, and Virginia. The company's deposit products include checking, savings, money market, time deposit, and individual retirement accounts. Its loan portfolio comprises residential mortgage loans; commercial real estate loans; construction and land acquisition, and development loans for the construction of one-to-four family dwellings; commercial construction loans; land loans; residential lot loans; business and commercial loans; and home equity loans, home equity lines of credit, and other consumer loans. The company also offers cash management, ATM, credit and debit card, safe deposit box, Internet and telephone banking, and other products and services. In addition, it provides commercial real estate brokerage and property management services, as well as acquires real estate for syndication and investment purposes. The company operates through five branches in Anne Arundel County, Maryland. Severn Bancorp, Inc. was founded in 1946 and is headquartered in Annapolis, Maryland.

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