WSFS Financial (NASDAQ:WSFS) and First Capital (NASDAQ:FCAP) Critical Analysis

WSFS Financial (NASDAQ:WSFS) and First Capital (NASDAQ:FCAP) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Valuation and Earnings

This table compares WSFS Financial and First Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WSFS Financial	$1.40 billion	2.05	$263.67 million	$4.56	11.26
First Capital	$58.13 million	2.31	$11.94 million	$3.94	10.15

WSFS Financial has higher revenue and earnings than First Capital. First Capital is trading at a lower price-to-earnings ratio than WSFS Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares WSFS Financial and First Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WSFS Financial	19.29%	10.15%	1.29%
First Capital	21.45%	11.23%	1.10%

Volatility and Risk

WSFS Financial has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, First Capital has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Institutional & Insider Ownership

88.5% of WSFS Financial shares are held by institutional investors. Comparatively, 11.7% of First Capital shares are held by institutional investors. 1.2% of WSFS Financial shares are held by insiders. Comparatively, 4.0% of First Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

WSFS Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. First Capital pays an annual dividend of $1.24 per share and has a dividend yield of 3.1%. WSFS Financial pays out 14.9% of its earnings in the form of a dividend. First Capital pays out 31.5% 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. WSFS Financial has increased its dividend for 1 consecutive years and First Capital has increased its dividend for 2 consecutive years. First Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for WSFS Financial and First Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WSFS Financial	0	2	4	0	2.67
First Capital	0	0	1	0	3.00

WSFS Financial currently has a consensus price target of $66.25, suggesting a potential upside of 29.04%. Given WSFS Financial’s higher possible upside, research analysts plainly believe WSFS Financial is more favorable than First Capital.

Summary

WSFS Financial beats First Capital on 10 of the 17 factors compared between the two stocks.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.

About First Capital

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.