Analyzing Community Bank System (CBU) and WesBanco (WSBC)

Community Bank System (NYSE: CBU) and WesBanco (NASDAQ:WSBC) are both banks – nec companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for Community Bank System and WesBanco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Bank System 1 4 0 0 1.80
WesBanco 0 5 2 0 2.29

Community Bank System presently has a consensus price target of $54.00, indicating a potential upside of 3.55%. WesBanco has a consensus price target of $42.00, indicating a potential upside of 7.91%. Given WesBanco’s stronger consensus rating and higher probable upside, analysts plainly believe WesBanco is more favorable than Community Bank System.

Insider and Institutional Ownership

69.1% of Community Bank System shares are owned by institutional investors. Comparatively, 58.0% of WesBanco shares are owned by institutional investors. 3.2% of Community Bank System shares are owned by company insiders. Comparatively, 4.1% of WesBanco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Community Bank System has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, WesBanco has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Dividends

Community Bank System pays an annual dividend of $1.36 per share and has a dividend yield of 2.6%. WesBanco pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. Community Bank System pays out 63.8% of its earnings in the form of a dividend. WesBanco pays out 44.4% 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 raised its dividend for 6 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Community Bank System and WesBanco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Bank System 21.00% 9.22% 1.33%
WesBanco 24.73% 7.66% 1.07%

Valuation and Earnings

This table compares Community Bank System and WesBanco’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Community Bank System $441.14 million 5.98 $103.81 million $2.13 24.48
WesBanco $367.60 million 4.66 $86.63 million $2.34 16.63

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

Summary

WesBanco beats Community Bank System on 9 of the 17 factors compared between the two stocks.

Community Bank System Company Profile

Community Bank System, Inc. is a bank holding company. The Company owns two subsidiaries: Community Bank, N.A. (CBNA or the Bank) and Benefit Plans Administrative Services, Inc. (BPAS). It operates in three segments: banking, employee benefit services, and All Other. The Banking segment provides lending and depository-related products and services to individuals, businesses and municipal enterprises. The Employee benefit services segment, consisting of BPAS and its subsidiaries, provides employee benefit trust services; collective investment fund; actuarial services, and healthcare consulting services. The All Other segment consists of wealth management services, including trust services provided by the personal trust unit within the Bank, broker-dealer and investment advisory services provided by Community Investment Services, Inc. (CISI), Oneida Wealth Management, Inc. (OWM) and The Carta Group, Inc, and asset management provided by Nottingham Advisors, Inc.

WesBanco Company Profile

WesBanco, Inc. (WesBanco) is a bank holding company. The Company offers a range of financial services, including retail banking, corporate banking, personal and corporate trust services, brokerage services, mortgage banking and insurance. WesBanco offers its services through two segments: community banking, which offers services, such as commercial demand, individual demand and time deposit accounts, as well as commercial, mortgage and individual installment loans, and trust and investment services, which offers trust services, as well as various alternative investment products, including mutual funds. The Community Banking segment also offers insurance and securities brokerage services, among others. As of December 31, 2016, WesBanco operated one commercial bank, WesBanco Bank, Inc. through 174 branches and 163 automated teller machines (ATMs) located in West Virginia, Ohio, western Pennsylvania, Kentucky and southern Indiana.

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