Walker & Dunlop (NYSE: WD) and Meta Financial Group (NASDAQ:CASH) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.
This is a summary of current ratings for Walker & Dunlop and Meta Financial Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Walker & Dunlop||0||1||1||0||2.50|
|Meta Financial Group||0||0||3||0||3.00|
Walker & Dunlop presently has a consensus price target of $52.00, indicating a potential upside of 7.71%. Meta Financial Group has a consensus price target of $94.33, indicating a potential upside of 1.16%. Given Walker & Dunlop’s higher possible upside, equities research analysts clearly believe Walker & Dunlop is more favorable than Meta Financial Group.
Earnings and Valuation
This table compares Walker & Dunlop and Meta Financial Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Walker & Dunlop||$575.28 million||2.61||$113.89 million||$4.65||10.38|
|Meta Financial Group||$280.27 million||3.22||$44.91 million||$4.79||19.47|
Walker & Dunlop has higher revenue and earnings than Meta Financial Group. Walker & Dunlop is trading at a lower price-to-earnings ratio than Meta Financial Group, indicating that it is currently the more affordable of the two stocks.
This table compares Walker & Dunlop and Meta Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Walker & Dunlop||21.81%||22.35%||4.65%|
|Meta Financial Group||16.03%||15.91%||1.50%|
Insider and Institutional Ownership
77.5% of Walker & Dunlop shares are held by institutional investors. Comparatively, 76.9% of Meta Financial Group shares are held by institutional investors. 11.7% of Walker & Dunlop shares are held by insiders. Comparatively, 5.4% of Meta Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Meta Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Walker & Dunlop does not pay a dividend. Meta Financial Group pays out 10.9% of its earnings in the form of a dividend.
Risk & Volatility
Walker & Dunlop has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Meta Financial Group has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.
Walker & Dunlop beats Meta Financial Group on 10 of the 16 factors compared between the two stocks.
About Walker & Dunlop
Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).
About Meta Financial Group
Meta Financial Group, Inc. is a unitary savings and loan holding company. The Company operates through its banking subsidiary, MetaBank (the Bank). Its segments include Payments, Banking, and Corporate Services/Other. MetaBank is both a community-oriented financial institution offering a range of financial services to meet the needs of the communities it serves and a payments company providing services on a nationwide basis. It operates in both the banking and payments industries through MetaBank, its retail banking operation; Meta Payment Systems (MPS), its electronic payments division; AFS/IBEX Financial Services Inc. (AFS/IBEX), its insurance premium financing division, and Refund Advantage, EPS Financial, LLC (EPS) Financial and Specialty Consumer Services, its tax-related financial solutions divisions.
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