Bank of the James Financial Group (NASDAQ:BOTJ) and Hancock Whitney (NASDAQ:HWC) Critical Review

Hancock Whitney (NASDAQ:HWC) and Bank of the James Financial Group (NASDAQ:BOTJ) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for Hancock Whitney and Bank of the James Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	3	4	3	3.00
Bank of the James Financial Group	0	1	0	0	2.00

Hancock Whitney currently has a consensus target price of $80.50, indicating a potential upside of 2.60%. Given Hancock Whitney’s stronger consensus rating and higher possible upside, research analysts clearly believe Hancock Whitney is more favorable than Bank of the James Financial Group.

Volatility and Risk

Hancock Whitney has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500.

Earnings & Valuation

This table compares Hancock Whitney and Bank of the James Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$1.44 billion	4.43	$486.07 million	$4.87	16.11
Bank of the James Financial Group	$62.51 million	1.94	$9.02 million	$2.42	11.03

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

Insider and Institutional Ownership

81.2% of Hancock Whitney shares are owned by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are owned by institutional investors. 0.9% of Hancock Whitney shares are owned by company insiders. Comparatively, 11.9% of Bank of the James Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Hancock Whitney pays an annual dividend of $2.00 per share and has a dividend yield of 2.5%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Hancock Whitney pays out 41.1% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 16.5% 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. Hancock Whitney has increased its dividend for 3 consecutive years and Bank of the James Financial Group has increased its dividend for 5 consecutive years.

Profitability

This table compares Hancock Whitney and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	21.34%	11.20%	1.40%
Bank of the James Financial Group	17.17%	14.13%	1.06%

Summary

Hancock Whitney beats Bank of the James Financial Group on 14 of the 18 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.