Wintrust Financial (WTFC) and Kentucky Bancshares (KTYB) Critical Contrast

Wintrust Financial (NASDAQ:WTFC) and Kentucky Bancshares (OTCMKTS:KTYB) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Dividends

Wintrust Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Kentucky Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 2.7%. Wintrust Financial pays out 17.1% of its earnings in the form of a dividend. Wintrust Financial has increased its dividend for 5 consecutive years.

Earnings & Valuation

This table compares Wintrust Financial and Kentucky Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wintrust Financial $1.53 billion 2.75 $343.16 million $5.86 12.72
Kentucky Bancshares $52.47 million 2.68 $10.71 million N/A N/A

Wintrust Financial has higher revenue and earnings than Kentucky Bancshares.

Institutional & Insider Ownership

88.6% of Wintrust Financial shares are held by institutional investors. Comparatively, 3.0% of Kentucky Bancshares shares are held by institutional investors. 1.6% of Wintrust Financial shares are held by company insiders. Comparatively, 15.1% of Kentucky Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Wintrust Financial and Kentucky Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wintrust Financial 0 2 5 1 2.88
Kentucky Bancshares 0 0 0 0 N/A

Wintrust Financial presently has a consensus price target of $96.11, suggesting a potential upside of 28.92%. Given Wintrust Financial’s higher possible upside, equities analysts plainly believe Wintrust Financial is more favorable than Kentucky Bancshares.

Risk and Volatility

Wintrust Financial has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Kentucky Bancshares has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Profitability

This table compares Wintrust Financial and Kentucky Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wintrust Financial 22.47% 11.36% 1.15%
Kentucky Bancshares 20.07% 12.47% 1.19%

Summary

Wintrust Financial beats Kentucky Bancshares on 11 of the 16 factors compared between the two stocks.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company in the Chicago metropolitan area, southern Wisconsin, and northwest Indiana. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), Internet banking, and other services. It also engages in the origination and purchase of residential mortgages for sale into the secondary market; and provision of lending, deposits, and cash management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional customers. The Specialty Finance segment offers commercial and life insurance premiums for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; and other specialty finance services, as well as data processing of payrolls, billing, and cash management services to temporary staffing service clients. The Wealth Management segment provides trust and investment, asset management, securities brokerage, and retirement plan services. As of December 31, 2017, the company had approximately 157 banking facilities and 212 ATMs. Wintrust Financial Corporation was founded in 1992 and is headquartered in Rosemont, Illinois.

About Kentucky Bancshares

Kentucky Bancshares, Inc. operates as a bank holding company for Kentucky Bank that provides commercial and consumer banking products and services. It accepts various deposit products, including checking, savings, and money market accounts; and certificates of deposit, safe deposits, interest and noninterest bearing deposits, and time deposits. The company also offers commercial, agricultural, and real estate loans to small-to-medium-sized industrial, service, and agricultural businesses; and residential mortgages, installments, and other loans to its individual and other non-commercial customers. In addition, it provides credit cards and other consumer-oriented financial services; brokerage services, annuities, life and long term care insurance, personal trust, and agency services; and Internet banking services, such as bill payment. The company has operations in Bourbon, Clark, Elliott, Fayette, Harrison, Jessamine, Madison, Rowan, Scott, Woodford, and other counties in Kentucky. Kentucky Bancshares, Inc. was founded in 1851 and is headquartered in Paris, Kentucky.

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