Financial Comparison: Westamerica Bancorporation (NASDAQ:WABC) and Five Star Bancorp (NASDAQ:FSBC)

Five Star Bancorp (NASDAQ:FSBC) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Earnings & Valuation

This table compares Five Star Bancorp and Westamerica 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	$255.47 million	3.19	$61.61 million	$2.90	13.14
Westamerica Bancorporation	$271.77 million	4.63	$116.17 million	$4.52	11.50

Westamerica Bancorporation has higher revenue and earnings than Five Star Bancorp. Westamerica 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Five Star Bancorp and Westamerica Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	2	5	0	2.71
Westamerica Bancorporation	0	2	1	0	2.33

Five Star Bancorp presently has a consensus price target of $40.00, indicating a potential upside of 4.99%. Westamerica Bancorporation has a consensus price target of $52.50, indicating a potential upside of 1.02%. Given Five Star Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Five Star Bancorp is more favorable than Westamerica Bancorporation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	24.11%	14.49%	1.36%
Westamerica Bancorporation	42.75%	12.52%	1.96%

Dividends

Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Westamerica Bancorporation pays an annual dividend of $1.84 per share and has a dividend yield of 3.5%. Five Star Bancorp pays out 34.5% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 40.7% 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. Westamerica Bancorporation has raised its dividend for 34 consecutive years. Westamerica Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Five Star Bancorp has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Institutional and Insider Ownership

46.9% of Five Star Bancorp shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 21.7% of Five Star Bancorp shares are held by company insiders. Comparatively, 5.9% of Westamerica Bancorporation shares are held 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

Westamerica 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 Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.