Critical Survey: Westamerica Bancorporation (NASDAQ:WABC) and Old Point Financial (NASDAQ:OPOF)

Old Point Financial (NASDAQ:OPOF) and Westamerica Bancorporation (NASDAQ:WABC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Old Point Financial and Westamerica Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Point Financial	0	0	0	0	N/A
Westamerica Bancorporation	0	3	0	0	2.00

Westamerica Bancorporation has a consensus target price of $57.00, suggesting a potential upside of 15.90%. Given Westamerica Bancorporation’s higher probable upside, analysts plainly believe Westamerica Bancorporation is more favorable than Old Point Financial.

Valuation & Earnings

This table compares Old Point Financial and Westamerica Bancorporation’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Point Financial	$60.59 million	1.51	$7.73 million	$1.26	14.29
Westamerica Bancorporation	$327.54 million	4.01	$161.77 million	$5.92	8.31

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

Insider & Institutional Ownership

33.4% of Old Point Financial shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 21.1% of Old Point Financial shares are held by insiders. Comparatively, 4.4% of Westamerica Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Old Point Financial has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Old Point Financial and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old Point Financial	8.41%	6.69%	0.49%
Westamerica Bancorporation	47.12%	20.17%	2.38%

Dividends

Old Point Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.1%. Westamerica Bancorporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Old Point Financial pays out 44.4% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 29.7% 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. Old Point Financial has raised its dividend for 3 consecutive years and Westamerica Bancorporation has raised its dividend for 32 consecutive years. Westamerica Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Westamerica Bancorporation beats Old Point Financial on 13 of the 15 factors compared between the two stocks.

About Old Point Financial

Old Point Financial Corporation operates as the bank holding company for The Old Point National Bank of Phoebus that provides consumer, mortgage, and business banking services for individual and commercial customers in Virginia. It offers deposit products, including interest-bearing transaction accounts, money market deposit accounts, savings accounts, time deposits, and demand deposits. The company also provides real estate construction, commercial, and mortgage loans, such as residential 1-4 family mortgages, second mortgages, and equity lines of credit; and other loans. In addition, it offers retirement planning, estate planning, financial planning, estate and trust administration, retirement plan administration, tax, and investment management services; and insurance products, wealth management, and cash management services. Old Point Financial Corporation was founded in 1922 and is headquartered in Hampton, Virginia.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.