Contrasting Pathward Financial (NASDAQ:CASH) & Washington Trust Bancorp (NASDAQ:WASH)

Washington Trust Bancorp (NASDAQ:WASH) and Pathward Financial (NASDAQ:CASH) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 7.0%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.2%. 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. Pathward Financial pays out 2.4% of its earnings in the form of a dividend.

Risk and Volatility

Washington Trust Bancorp has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares Washington Trust Bancorp and Pathward Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$393.95 million	1.55	$52.24 million	$2.70	11.86
Pathward Financial	$851.49 million	2.31	$185.87 million	$8.18	11.04

Pathward Financial has higher revenue and earnings than Washington Trust Bancorp. Pathward Financial 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	13.26%	9.75%	0.78%
Pathward Financial	22.95%	22.76%	2.63%

Analyst Recommendations

This is a summary of recent ratings and price targets for Washington Trust Bancorp and Pathward Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	0	4	0	1	2.40
Pathward Financial	0	0	3	0	3.00

Washington Trust Bancorp presently has a consensus price target of $31.33, suggesting a potential downside of 2.11%. Pathward Financial has a consensus price target of $103.50, suggesting a potential upside of 14.57%. Given Pathward Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Pathward Financial is more favorable than Washington Trust Bancorp.

Institutional and Insider Ownership

65.8% of Washington Trust Bancorp shares are owned by institutional investors. Comparatively, 92.7% of Pathward Financial shares are owned by institutional investors. 1.1% of Washington Trust Bancorp shares are owned by company insiders. Comparatively, 1.4% of Pathward Financial shares are owned by company 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.

Summary

Pathward Financial beats Washington Trust Bancorp on 13 of the 17 factors compared between the two stocks.

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.

About Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.