Critical Analysis: Bay Commercial Bank (NASDAQ:BCML) versus WaFd (NASDAQ:WAFD)

Bay Commercial Bank (NASDAQ:BCML) and WaFd (NASDAQ:WAFD) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Dividends

Bay Commercial Bank pays an annual dividend of $0.80 per share and has a dividend yield of 2.8%. WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.5%. Bay Commercial Bank pays out 36.7% of its earnings in the form of a dividend. WaFd pays out 41.1% 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. Bay Commercial Bank has raised its dividend for 3 consecutive years and WaFd has raised its dividend for 2 consecutive years.

Risk and Volatility

Bay Commercial Bank has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, WaFd has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares Bay Commercial Bank and WaFd”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$138.09 million	2.23	$23.61 million	$2.18	12.94
WaFd	$1.43 billion	1.69	$200.04 million	$2.63	11.67

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bay Commercial Bank and WaFd, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	1	1	0	2.50
WaFd	0	4	0	0	2.00

Bay Commercial Bank presently has a consensus price target of $31.50, indicating a potential upside of 11.66%. WaFd has a consensus price target of $32.25, indicating a potential upside of 5.05%. Given Bay Commercial Bank’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bay Commercial Bank is more favorable than WaFd.

Profitability

This table compares Bay Commercial Bank and WaFd’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	17.36%	7.41%	0.93%
WaFd	15.57%	8.57%	0.85%

Insider & Institutional Ownership

66.2% of Bay Commercial Bank shares are owned by institutional investors. Comparatively, 83.7% of WaFd shares are owned by institutional investors. 7.2% of Bay Commercial Bank shares are owned by company insiders. Comparatively, 1.5% of WaFd shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Bay Commercial Bank beats WaFd on 10 of the 17 factors compared between the two stocks.

About Bay Commercial Bank

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.