WesBanco (NASDAQ:WSBC) versus Alerus Financial (NASDAQ:ALRS) Critical Survey

WesBanco (NASDAQ:WSBC) and Alerus Financial (NASDAQ:ALRS) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Dividends

WesBanco pays an annual dividend of $1.48 per share and has a dividend yield of 4.6%. Alerus Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.2%. WesBanco pays out 70.8% of its earnings in the form of a dividend. Alerus Financial pays out 500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WesBanco has raised its dividend for 14 consecutive years and Alerus Financial has raised its dividend for 21 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations for WesBanco and Alerus Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WesBanco	0	3	2	1	2.67
Alerus Financial	0	3	2	0	2.40

WesBanco currently has a consensus target price of $37.83, indicating a potential upside of 18.08%. Alerus Financial has a consensus target price of $23.20, indicating a potential upside of 20.64%. Given Alerus Financial’s higher probable upside, analysts plainly believe Alerus Financial is more favorable than WesBanco.

Profitability

This table compares WesBanco and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WesBanco	14.79%	5.75%	0.78%
Alerus Financial	1.01%	6.02%	0.54%

Institutional & Insider Ownership

61.4% of WesBanco shares are held by institutional investors. Comparatively, 51.3% of Alerus Financial shares are held by institutional investors. 3.4% of WesBanco shares are held by company insiders. Comparatively, 5.6% of Alerus Financial 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.

Valuation & Earnings

This table compares WesBanco and Alerus Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WesBanco	$584.63 million	3.66	$159.03 million	$2.09	15.33
Alerus Financial	$170.07 million	2.87	$11.70 million	$0.16	120.19

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

Risk and Volatility

WesBanco has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Summary

WesBanco beats Alerus Financial on 12 of the 17 factors compared between the two stocks.

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.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.