Contrasting Prosperity Bancshares (NYSE:PB) & FinWise Bancorp (NASDAQ:FINW)

Prosperity Bancshares (NYSE:PB) and FinWise Bancorp (NASDAQ:FINW) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of recent ratings for Prosperity Bancshares and FinWise Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	1	7	7	0	2.40
FinWise Bancorp	0	1	1	1	3.00

Prosperity Bancshares currently has a consensus target price of $78.77, indicating a potential upside of 5.66%. FinWise Bancorp has a consensus target price of $22.00, indicating a potential upside of 24.50%. Given FinWise Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe FinWise Bancorp is more favorable than Prosperity Bancshares.

Risk & Volatility

Prosperity Bancshares has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Earnings & Valuation

This table compares Prosperity Bancshares and FinWise Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.74 billion	4.07	$542.84 million	$5.73	13.01
FinWise Bancorp	$150.96 million	1.59	$16.09 million	$1.13	15.64

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

Profitability

This table compares Prosperity Bancshares and FinWise Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	31.22%	7.11%	1.40%
FinWise Bancorp	10.66%	8.82%	1.90%

Institutional and Insider Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are owned by institutional investors. 4.2% of Prosperity Bancshares shares are owned by insiders. Comparatively, 21.3% of FinWise Bancorp shares are owned 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.

Summary

FinWise Bancorp beats Prosperity Bancshares on 8 of the 15 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

About FinWise Bancorp

FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.