Analyzing Eagle Bancorp Montana (NASDAQ:EBMT) and Washington Trust Bancorp (NASDAQ:WASH)

Eagle Bancorp Montana (NASDAQ:EBMT) 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 institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Dividends

Eagle Bancorp Montana pays an annual dividend of $0.57 per share and has a dividend yield of 3.4%. Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.4%. Eagle Bancorp Montana pays out 52.8% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 83.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eagle Bancorp Montana has increased its dividend for 14 consecutive years and Washington Trust Bancorp has increased its dividend for 13 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Eagle Bancorp Montana and Washington Trust Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp Montana	0	1	0	0	2.00
Washington Trust Bancorp	0	2	0	0	2.00

Eagle Bancorp Montana presently has a consensus target price of $13.50, indicating a potential downside of 19.40%. Washington Trust Bancorp has a consensus target price of $34.00, indicating a potential downside of 2.94%. Given Washington Trust Bancorp’s higher possible upside, analysts clearly believe Washington Trust Bancorp is more favorable than Eagle Bancorp Montana.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp Montana	7.03%	4.96%	0.41%
Washington Trust Bancorp	11.24%	9.55%	0.63%

Insider & Institutional Ownership

35.7% of Eagle Bancorp Montana shares are held by institutional investors. Comparatively, 65.8% of Washington Trust Bancorp shares are held by institutional investors. 6.7% of Eagle Bancorp Montana shares are held by insiders. Comparatively, 1.7% of Washington Trust Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Eagle Bancorp Montana has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Washington Trust Bancorp has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Earnings & Valuation

This table compares Eagle Bancorp Montana and Washington Trust Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp Montana	$114.34 million	1.17	$10.06 million	$1.08	15.51
Washington Trust Bancorp	$364.80 million	1.64	$48.18 million	$2.67	13.12

Washington Trust Bancorp has higher revenue and earnings than Eagle Bancorp Montana. Washington Trust Bancorp is trading at a lower price-to-earnings ratio than Eagle Bancorp Montana, indicating that it is currently the more affordable of the two stocks.

Summary

Washington Trust Bancorp beats Eagle Bancorp Montana on 11 of the 15 factors compared between the two stocks.

About Eagle Bancorp Montana

Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.

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.