Financial Contrast: Lake Shore Bancorp (NASDAQ:LSBK) and WSFS Financial (NASDAQ:WSFS)

WSFS Financial (NASDAQ:WSFS) and Lake Shore Bancorp (NASDAQ:LSBK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares WSFS Financial and Lake Shore Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WSFS Financial	22.55%	11.23%	1.43%
Lake Shore Bancorp	20.23%	6.30%	1.11%

Dividends

WSFS Financial pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. WSFS Financial pays out 14.2% of its earnings in the form of a dividend. Lake Shore Bancorp pays out 30.5% 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. WSFS Financial has raised its dividend for 1 consecutive years.

Risk & Volatility

WSFS Financial has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Lake Shore Bancorp has a beta of 0.31, indicating that its stock price is 69% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for WSFS Financial and Lake Shore Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WSFS Financial	0	4	4	0	2.50
Lake Shore Bancorp	0	1	0	0	2.00

WSFS Financial presently has a consensus target price of $77.07, indicating a potential upside of 3.95%. Given WSFS Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe WSFS Financial is more favorable than Lake Shore Bancorp.

Institutional & Insider Ownership

88.5% of WSFS Financial shares are owned by institutional investors. Comparatively, 8.8% of Lake Shore Bancorp shares are owned by institutional investors. 1.1% of WSFS Financial shares are owned by company insiders. Comparatively, 8.4% of Lake Shore Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares WSFS Financial and Lake Shore Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WSFS Financial	$1.36 billion	2.84	$287.35 million	$5.62	13.19
Lake Shore Bancorp	$39.56 million	3.46	$7.27 million	$1.18	14.75

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

Summary

WSFS Financial beats Lake Shore Bancorp on 13 of the 17 factors compared between the two stocks.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.

About Lake Shore Bancorp

Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.