Financial Comparison: Five Star Bancorp (NASDAQ:FSBC) and Western Alliance Bancorporation (NYSE:WAL)

Five Star Bancorp (NASDAQ:FSBC) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Earnings and Valuation

This table compares Five Star Bancorp and Western Alliance Bancorporation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$213.40 million	3.29	$45.67 million	$2.45	13.42
Western Alliance Bancorporation	$5.08 billion	1.91	$787.70 million	$7.61	11.58

Western Alliance Bancorporation has higher revenue and earnings than Five Star Bancorp. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Five Star Bancorp has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Profitability

This table compares Five Star Bancorp and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	22.14%	12.89%	1.25%
Western Alliance Bancorporation	16.39%	12.62%	1.02%

Analyst Ratings

This is a breakdown of recent ratings for Five Star Bancorp and Western Alliance Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	1	4	0	2.80
Western Alliance Bancorporation	0	1	13	0	2.93

Five Star Bancorp presently has a consensus target price of $35.00, indicating a potential upside of 6.48%. Western Alliance Bancorporation has a consensus target price of $98.71, indicating a potential upside of 12.06%. Given Western Alliance Bancorporation’s stronger consensus rating and higher probable upside, analysts clearly believe Western Alliance Bancorporation is more favorable than Five Star Bancorp.

Dividends

Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Western Alliance Bancorporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. Five Star Bancorp pays out 32.7% of its earnings in the form of a dividend. Western Alliance Bancorporation pays out 20.0% 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 Alliance Bancorporation has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

46.9% of Five Star Bancorp shares are owned by institutional investors. Comparatively, 79.2% of Western Alliance Bancorporation shares are owned by institutional investors. 21.7% of Five Star Bancorp shares are owned by company insiders. Comparatively, 2.7% of Western Alliance Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Western Alliance Bancorporation beats Five Star Bancorp on 10 of the 17 factors compared between the two stocks.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.