Merchants Bancorp (NASDAQ:MBIN) versus Washington Trust Bancorp (NASDAQ:WASH) Head to Head Comparison

Merchants Bancorp (NASDAQ:MBIN) and Washington Trust Bancorp (NASDAQ:WASH) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Profitability

This table compares Merchants Bancorp and Washington Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merchants Bancorp	16.02%	13.17%	1.14%
Washington Trust Bancorp	13.26%	9.75%	0.78%

Valuation & Earnings

This table compares Merchants Bancorp and Washington Trust Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merchants Bancorp	$1.37 billion	1.58	$218.77 million	$3.78	12.40
Washington Trust Bancorp	$393.95 million	1.72	$52.24 million	$2.70	13.19

Merchants Bancorp has higher revenue and earnings than Washington Trust Bancorp. Merchants Bancorp is trading at a lower price-to-earnings ratio than Washington Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Merchants Bancorp has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Washington Trust Bancorp has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Merchants Bancorp and Washington Trust Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merchants Bancorp	0	1	3	1	3.00
Washington Trust Bancorp	0	5	0	0	2.00

Merchants Bancorp presently has a consensus price target of $43.25, suggesting a potential downside of 7.70%. Washington Trust Bancorp has a consensus price target of $31.33, suggesting a potential downside of 12.01%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Merchants Bancorp is more favorable than Washington Trust Bancorp.

Dividends

Merchants Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.3%. Merchants Bancorp pays out 11.6% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 83.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Merchants Bancorp has increased its dividend for 8 consecutive years.

Insider & Institutional Ownership

24.6% of Merchants Bancorp shares are owned by institutional investors. Comparatively, 65.8% of Washington Trust Bancorp shares are owned by institutional investors. 34.8% of Merchants Bancorp shares are owned by company insiders. Comparatively, 1.3% of Washington Trust Bancorp 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

Merchants Bancorp beats Washington Trust Bancorp on 14 of the 18 factors compared between the two stocks.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.