Summit Financial Group (NASDAQ:SMMF) & Washington Trust Bancorp (NASDAQ:WASH) Head-To-Head Analysis

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

Insider and Institutional Ownership

25.4% of Summit Financial Group shares are owned by institutional investors. Comparatively, 58.3% of Washington Trust Bancorp shares are owned by institutional investors. 2.6% of Summit Financial Group shares are owned by insiders. Comparatively, 2.2% of Washington Trust Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Summit Financial Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Washington Trust Bancorp pays an annual dividend of $2.04 per share and has a dividend yield of 3.9%. Summit Financial Group pays out 26.5% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 51.9% 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.

Analyst Ratings

This is a summary of current recommendations for Summit Financial Group and Washington Trust Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Financial Group 0 0 0 0 N/A
Washington Trust Bancorp 0 2 1 0 2.33

Washington Trust Bancorp has a consensus target price of $54.33, suggesting a potential upside of 4.69%. Given Washington Trust Bancorp’s higher probable upside, analysts clearly believe Washington Trust Bancorp is more favorable than Summit Financial Group.

Risk & Volatility

Summit Financial Group has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Washington Trust Bancorp has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares Summit Financial Group and Washington Trust Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Financial Group $112.83 million 2.92 $28.07 million $2.26 11.70
Washington Trust Bancorp $238.52 million 3.78 $68.43 million $3.93 13.21

Washington Trust Bancorp has higher revenue and earnings than Summit Financial Group. Summit Financial Group 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 Summit Financial Group and Washington Trust Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Financial Group 25.07% 13.38% 1.37%
Washington Trust Bancorp 26.76% 14.84% 1.37%

Summary

Washington Trust Bancorp beats Summit Financial Group on 11 of the 14 factors compared between the two stocks.

Summit Financial Group Company Profile

Summit Financial Group, Inc. operates as a financial holding company for Summit Community Bank, Inc. that provides community banking and other financial services to individuals and businesses primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Southwestern regions of Virginia. The company operates through three segments: Community Banking, Trust and Wealth Management, and Insurance. Its community banking services include demand, savings, and time deposits; commercial, commercial real estate, construction and land development, residential real estate, and consumer loans; and mortgage warehouse lines of credit, as well as trust and wealth management, and cash management services. The company also offers insurance brokerage services, such as corporate and personal property and casualty insurance products, as well as group health and life insurance products, and consulting services. It operates thirty banking locations. Summit Financial Group, Inc. was founded in 1987 and is headquartered in Moorefield, West Virginia.

Washington Trust Bancorp Company Profile

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that offers various financial products and services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment provides various commercial and retail lending products, which include commercial real estate loans consisting of commercial mortgages and construction loans; commercial and industrial loans; residential real estate 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 offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits, as well as debit card, ATM, telephone and Internet banking, mobile banking, remote deposit capture, and other cash management services. The Wealth Management Services segment provides 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. This segment serves personal and institutional, and mutual funds clients. The company also operates as a licensed broker-dealer that offers variable annuities, college savings plans, and mutual funds. As of December 31, 2018, it had 10 branch offices located in southern Rhode Island; 11 branch offices located in the greater Providence area in Rhode Island; and 1 branch office located in southeastern Connecticut. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

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