Analyzing Hudson Valley (HVB) and Westamerica Bancorporation (WABC)

Hudson Valley (NYSE: HVB) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap banks – nec companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Dividends

Westamerica Bancorporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.7%. Hudson Valley does not pay a dividend. Westamerica Bancorporation pays out 84.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hudson Valley has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

85.7% of Westamerica Bancorporation shares are owned by institutional investors. 4.9% of Westamerica Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Hudson Valley and Westamerica Bancorporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hudson Valley N/A N/A N/A $0.55 51.29
Westamerica Bancorporation $190.46 million 8.32 $50.02 million $1.90 31.55

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

Profitability

This table compares Hudson Valley and Westamerica Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hudson Valley 17.98% 6.34% 0.61%
Westamerica Bancorporation 26.26% 10.30% 1.13%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hudson Valley and Westamerica Bancorporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudson Valley 0 0 0 0 N/A
Westamerica Bancorporation 2 2 0 0 1.50

Westamerica Bancorporation has a consensus price target of $54.00, suggesting a potential downside of 9.92%. Given Westamerica Bancorporation’s higher probable upside, analysts clearly believe Westamerica Bancorporation is more favorable than Hudson Valley.

Summary

Westamerica Bancorporation beats Hudson Valley on 9 of the 12 factors compared between the two stocks.

About Hudson Valley

Hudson Valley Holding Corp. (Hudson Valley) is a bank holding company. The Company provides financial services through its wholly owned subsidiary, Hudson Valley Bank, N.A. (HVB or the Bank), a national banking association. HVB has 17 branch offices in Westchester County, New York, four in Manhattan, New York, four in Bronx County, New York, two in Rockland County, New York, and one in Kings County, New York. The Company provides asset-based lending products through a wholly owned subsidiary of HVB, HVB Capital Credit LLC. The Company provides equipment loan and lease financing through a wholly owned subsidiary of HVB, HVB Equipment Capital, LLC. The Company’s principal customers are businesses, professionals, municipalities, not-for-profit organizations and individuals. In addition, the Company also offers a software application designed to meet the administrative needs of bankruptcy trustees through a marketing and licensing agreement with the application vendor.

About Westamerica Bancorporation

Westamerica Bancorporation is a bank holding company. The Company provides a range of banking services to individual and corporate customers in Northern and Central California through its subsidiary bank, Westamerica Bank. The communities served are located in Northern and Central California, from Mendocino, Lake and Nevada Counties in the north to Kern County in the south. It provides a range of loans, including commercial loans, commercial real estate loans, construction loans, residential real estate loans, and consumer installment and other loans. It maintains a securities portfolio consisting of securities issued by the United States Treasury, United States Government sponsored entities, agency and non-agency mortgage backed securities (MBS), non-agency commercial MBS, agency residential collateralized mortgage obligations (CMO), non-agency residential CMO, obligations of states and political subdivisions, asset-backed securities, corporate securities and other securities.

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