Financial Survey: Waterstone Financial (NASDAQ:WSBF) and Trustmark (NASDAQ:TRMK)

Trustmark (NASDAQ:TRMK) and Waterstone Financial (NASDAQ:WSBF) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Dividends

Trustmark pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Waterstone Financial pays an annual dividend of $0.68 per share and has a dividend yield of 3.3%. Trustmark pays out 25.4% of its earnings in the form of a dividend. Waterstone Financial pays out 39.5% 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. Trustmark has raised its dividend for 1 consecutive years.

Earnings & Valuation

This table compares Trustmark and Waterstone Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trustmark	$1.12 billion	2.41	$224.13 million	$3.94	11.86
Waterstone Financial	$147.05 million	2.50	$26.40 million	$1.72	11.90

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

Volatility and Risk

Trustmark has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Profitability

This table compares Trustmark and Waterstone Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trustmark	20.75%	10.69%	1.20%
Waterstone Financial	14.57%	8.64%	1.33%

Insider & Institutional Ownership

67.6% of Trustmark shares are held by institutional investors. Comparatively, 62.7% of Waterstone Financial shares are held by institutional investors. 1.7% of Trustmark shares are held by insiders. Comparatively, 6.0% of Waterstone Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Trustmark and Waterstone Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trustmark	0	5	1	1	2.43
Waterstone Financial	0	0	1	0	3.00

Trustmark currently has a consensus target price of $47.38, suggesting a potential upside of 1.42%. Given Trustmark’s higher probable upside, research analysts plainly believe Trustmark is more favorable than Waterstone Financial.

Summary

Trustmark beats Waterstone Financial on 10 of the 17 factors compared between the two stocks.

About Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company operates through three segments: General Banking, Wealth Management, and Insurance. It offers checking, savings, and money market accounts; certificates of deposits and individual retirement accounts; financing for commercial and industrial projects, income-producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit, as well as treasury management services. The company also provides mortgage banking services, including construction financing, production of conventional and government-insured mortgages, and secondary marketing and mortgage servicing. In addition, it provides wealth management and trust services, such as administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. Further, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.