Prosperity Bancshares (PB) and Western New England Bancorp (WNEB) Financial Review

Prosperity Bancshares (NYSE: PB) and Western New England Bancorp (NASDAQ:WNEB) are both financials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares Prosperity Bancshares and Western New England Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prosperity Bancshares 34.28% 7.28% 1.22%
Western New England Bancorp 14.93% 5.99% 0.72%

Institutional and Insider Ownership

76.8% of Prosperity Bancshares shares are held by institutional investors. Comparatively, 56.9% of Western New England Bancorp shares are held by institutional investors. 4.9% of Prosperity Bancshares shares are held by company insiders. Comparatively, 5.6% of Western New England Bancorp shares are held by company 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

Prosperity Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. Western New England Bancorp pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Prosperity Bancshares pays out 36.7% of its earnings in the form of a dividend. Western New England Bancorp pays out 29.3% 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. Western New England Bancorp has raised its dividend for 14 consecutive years.

Risk and Volatility

Prosperity Bancshares has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Prosperity Bancshares and Western New England Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prosperity Bancshares 2 7 2 0 2.00
Western New England Bancorp 0 3 1 0 2.25

Prosperity Bancshares currently has a consensus price target of $74.00, suggesting a potential downside of 3.86%. Western New England Bancorp has a consensus price target of $11.75, suggesting a potential upside of 9.30%. Given Western New England Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Western New England Bancorp is more favorable than Prosperity Bancshares.

Earnings & Valuation

This table compares Prosperity Bancshares and Western New England Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Prosperity Bancshares $793.99 million 6.74 $272.16 million $3.92 19.64
Western New England Bancorp $82.54 million 3.99 $4.83 million $0.41 26.22

Prosperity Bancshares has higher revenue and earnings than Western New England Bancorp. Prosperity Bancshares is trading at a lower price-to-earnings ratio than Western New England Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Prosperity Bancshares beats Western New England Bancorp on 11 of the 17 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. is a financial holding company, which operates through its bank subsidiary, Prosperity Bank (the Bank). The Bank provides a range of financial products and services to small and medium-sized businesses and consumers. The Company, through the Bank, offers a range of loan and deposit products to its customers. At December 31, 2016, the Bank maintained approximately 598,400 separate deposit accounts including certificates of deposit and 53,600 separate loan accounts. It offered commercial real estate (including multifamily residential) and one- to four-family residential loans, as of December 31, 2016. As of December 31, 2016, the Bank operated 245 full service banking locations; 65 in the Houston area; 29 in the South Texas area; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area; 34 in the West Texas area; 16 in the Bryan/College Station area, six in the Central Oklahoma area and eight in the Tulsa, Oklahoma area.

About Western New England Bancorp

Western New England Bancorp, Inc., formerly Westfield Financial, Inc., is a Massachusetts-chartered stock holding company. The Company serves as a holding company for Westfield Bank (the Bank). It is a provider of banking products and services to business organizations and individuals, including products such as residential and commercial loans, consumer loans and a variety of deposit products. It focuses on residential real estate lending, as well as servicing commercial customers, including commercial and industrial lending and commercial deposit relationships. In addition, it provides online banking services. It operates through over 21 banking offices located in Agawam, Chicopee, East Longmeadow, Feeding Hills, Holyoke, Ludlow, Southwick, Springfield, Ware, West Springfield and Westfield, Massachusetts, and Granby and Enfield, Connecticut. It also has over 10 automated teller machine (ATM) locations in Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts.

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