Reviewing WaFd (NASDAQ:WAFD) & Columbia Banking System (NASDAQ:COLB)

Columbia Banking System (NASDAQ:COLB) and WaFd (NASDAQ:WAFD) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Profitability

This table compares Columbia Banking System and WaFd’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	19.28%	11.41%	1.30%
WaFd	18.25%	8.94%	0.90%

Volatility and Risk

Columbia Banking System has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, WaFd has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares Columbia Banking System and WaFd”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$3.21 billion	2.67	$550.00 million	$2.51	11.81
WaFd	$1.41 billion	1.86	$226.07 million	$3.06	11.62

Columbia Banking System has higher revenue and earnings than WaFd. WaFd is trading at a lower price-to-earnings ratio than Columbia Banking System, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Columbia Banking System and WaFd, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	9	4	1	2.43
WaFd	0	4	1	1	2.50

Columbia Banking System currently has a consensus price target of $32.13, suggesting a potential upside of 8.38%. WaFd has a consensus price target of $34.80, suggesting a potential downside of 2.14%. Given Columbia Banking System’s higher probable upside, equities analysts plainly believe Columbia Banking System is more favorable than WaFd.

Institutional and Insider Ownership

92.5% of Columbia Banking System shares are held by institutional investors. Comparatively, 83.7% of WaFd shares are held by institutional investors. 0.6% of Columbia Banking System shares are held by insiders. Comparatively, 1.5% of WaFd shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.0%. WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.0%. Columbia Banking System pays out 59.0% of its earnings in the form of a dividend. WaFd pays out 35.3% 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. Columbia Banking System has raised its dividend for 4 consecutive years and WaFd has raised its dividend for 2 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Columbia Banking System beats WaFd on 12 of the 17 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.