Analyzing NASB Financial (OTCMKTS:NASB) and West Bancorporation (NASDAQ:WTBA)

NASB Financial (OTCMKTS:NASB) and West Bancorporation (NASDAQ:WTBA) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Profitability

This table compares NASB Financial and West Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NASB Financial	15.19%	6.85%	0.97%
West Bancorporation	16.04%	13.40%	0.80%

Institutional & Insider Ownership

44.3% of West Bancorporation shares are held by institutional investors. 47.0% of NASB Financial shares are held by insiders. Comparatively, 4.6% of West Bancorporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NASB Financial and West Bancorporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NASB Financial	0	0	0	0	0.00
West Bancorporation	0	3	0	0	2.00

West Bancorporation has a consensus target price of $24.00, indicating a potential upside of 10.24%. Given West Bancorporation’s stronger consensus rating and higher possible upside, analysts plainly believe West Bancorporation is more favorable than NASB Financial.

Dividends

NASB Financial pays an annual dividend of $1.40 per share and has a dividend yield of 3.7%. West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. NASB Financial pays out 35.2% of its earnings in the form of a dividend. West Bancorporation pays out 52.6% 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.

Valuation & Earnings

This table compares NASB Financial and West Bancorporation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NASB Financial	$168.58 million	1.61	$28.72 million	$3.98	9.42
West Bancorporation	$198.50 million	1.86	$24.05 million	$1.90	11.46

NASB Financial has higher earnings, but lower revenue than West Bancorporation. NASB Financial is trading at a lower price-to-earnings ratio than West Bancorporation, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

NASB Financial has a beta of 0.03, indicating that its stock price is 97% less volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Summary

West Bancorporation beats NASB Financial on 10 of the 15 factors compared between the two stocks.

About NASB Financial

NASB Financial, Inc. operates as a unitary thrift holding company for North American Savings Bank, F.S.B. that provides various banking products and services in the United States. The company offers checking, savings, money market, and certificate of deposit accounts. It also mortgages and refinancing products, including conventional, veterans administration, federal housing administration, jumbo, and IRA residential real-estate loans. In addition, the company provides commercial real estate development and commercial loans, such as multifamily, retail, single-tenant, multi-tenant, office, industrial, and other loans; investment property loans; and construction and development loans. The company was founded in 1927 and is based in Grandview, Missouri.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.