Critical Survey: Eastern Virginia Bankshares (EVBS) versus Wintrust Financial (WTFC)

Eastern Virginia Bankshares (NASDAQ: EVBS) and Wintrust Financial (NASDAQ:WTFC) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

This table compares Eastern Virginia Bankshares and Wintrust Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eastern Virginia Bankshares 13.18% 4.20% 0.50%
Wintrust Financial 20.35% 9.49% 0.95%

Valuation & Earnings

This table compares Eastern Virginia Bankshares and Wintrust Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eastern Virginia Bankshares N/A N/A N/A $0.31 N/A
Wintrust Financial $1.27 billion 3.82 $257.68 million $4.40 19.64

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eastern Virginia Bankshares and Wintrust Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eastern Virginia Bankshares 0 1 0 0 2.00
Wintrust Financial 0 6 4 0 2.40

Eastern Virginia Bankshares presently has a consensus target price of $11.00, indicating a potential upside of Infinity. Wintrust Financial has a consensus target price of $88.25, indicating a potential upside of 2.12%. Given Eastern Virginia Bankshares’ higher possible upside, equities analysts clearly believe Eastern Virginia Bankshares is more favorable than Wintrust Financial.

Dividends

Eastern Virginia Bankshares pays an annual dividend of $0.12 per share. Wintrust Financial pays an annual dividend of $0.76 per share and has a dividend yield of 0.9%. Eastern Virginia Bankshares pays out 38.7% of its earnings in the form of a dividend. Wintrust Financial pays out 17.3% 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. Wintrust Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

44.2% of Eastern Virginia Bankshares shares are owned by institutional investors. Comparatively, 90.4% of Wintrust Financial shares are owned by institutional investors. 4.8% of Eastern Virginia Bankshares shares are owned by insiders. Comparatively, 2.0% of Wintrust Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Wintrust Financial beats Eastern Virginia Bankshares on 10 of the 13 factors compared between the two stocks.

Eastern Virginia Bankshares Company Profile

Eastern Virginia Bankshares, Inc. is a bank holding company. The Company operates through its bank subsidiary, EVB (the Bank). EVB is a community bank focusing on small to medium-sized businesses and consumers in its coastal plain markets and the emerging suburbs outside of the Richmond, Tidewater, and southern Virginia areas. The Company provides general commercial financial services to customers located in the geographic areas of its retail branch network. It provides a range of personal and commercial banking services, including commercial, consumer and real estate loans. Its investment securities include agency residential mortgage-backed securities, agency commercial mortgage-backed securities, and state and political subdivisions. The Company offers a range of retail and commercial deposit products and fee-based services. Its deposits include demand deposits, savings and money market accounts, and time deposits.

Wintrust Financial Company Profile

Wintrust Financial Corporation is a financial holding company. The Company conducts its businesses through three segments: community banking, specialty finance and wealth management. The Company offers community banking services to individuals, small to mid-sized businesses, local governmental units and institutional clients. Through specialty finance segment, the Company offers financing of insurance premiums for businesses and individuals; accounts receivable financing, value-added, out-sourced administrative services, and other specialty finance businesses. The Company offers a range of wealth management services through its subsidiaries, including trust and investment services, asset management and securities brokerage services. The Company offers MaxSafe deposit accounts, which provide customers with expanded Federal Deposit Insurance Corporation (FDIC) insurance coverage by spreading a customer’s deposit across its banks.

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