Financial Contrast: WesBanco (NASDAQ:WSBC) vs. First United (NASDAQ:FUNC)

First United (NASDAQ:FUNC) and WesBanco (NASDAQ:WSBC) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Profitability

This table compares First United and WesBanco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First United	13.82%	11.64%	0.97%
WesBanco	17.52%	6.50%	0.87%

Dividends

First United pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. WesBanco pays an annual dividend of $1.44 per share and has a dividend yield of 4.9%. First United pays out 37.2% of its earnings in the form of a dividend. WesBanco pays out 60.0% 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. WesBanco has increased its dividend for 13 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares First United and WesBanco’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First United	$99.49 million	1.45	$15.06 million	$2.15	10.07
WesBanco	$831.96 million	2.11	$159.03 million	$2.40	12.32

WesBanco has higher revenue and earnings than First United. First United is trading at a lower price-to-earnings ratio than WesBanco, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First United has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, WesBanco has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for First United and WesBanco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First United	0	0	0	0	N/A
WesBanco	0	3	2	0	2.40

WesBanco has a consensus target price of $30.60, suggesting a potential upside of 3.48%. Given WesBanco’s higher possible upside, analysts plainly believe WesBanco is more favorable than First United.

Institutional and Insider Ownership

33.3% of First United shares are held by institutional investors. Comparatively, 61.4% of WesBanco shares are held by institutional investors. 7.8% of First United shares are held by company insiders. Comparatively, 3.4% of WesBanco shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

WesBanco beats First United on 12 of the 16 factors compared between the two stocks.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.

About WesBanco

WesBanco, Inc. operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, mortgage banking, and insurance services to individuals and businesses in the United States. The company operates through two segments, Community Banking, and Trust and Investment Services. It offers commercial demand, individual demand, and time deposit accounts; commercial, mortgage and individual installment loans; retail loans, such as residential real estate mortgage loans, home equity lines of credit, and loans for other consumer purposes; installment loans to finance the purchase of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and various non-traditional offerings, such as insurance and securities brokerage services. The company also provides trust services; and various alternative investment products, including mutual funds and annuities. In addition, it acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. WesBanco, Inc. was founded in 1870 and is headquartered in Wheeling, West Virginia.