Financial Comparison: Wintrust Financial (NASDAQ:WTFC) vs. First Business Financial Services (NASDAQ:FBIZ)

Wintrust Financial (NASDAQ:WTFC) and First Business Financial Services (NASDAQ:FBIZ) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Earnings & Valuation

This table compares Wintrust Financial and First Business Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wintrust Financial	$2.65 billion	3.35	$695.04 million	$10.88	12.20
First Business Financial Services	$167.56 million	2.57	$44.24 million	$6.08	8.52

Wintrust Financial has higher revenue and earnings than First Business Financial Services. First Business Financial Services is trading at a lower price-to-earnings ratio than Wintrust Financial, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Wintrust Financial has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Wintrust Financial and First Business Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wintrust Financial	0	2	11	1	2.93
First Business Financial Services	0	0	4	0	3.00

Wintrust Financial presently has a consensus price target of $152.92, indicating a potential upside of 15.16%. First Business Financial Services has a consensus price target of $60.67, indicating a potential upside of 17.09%. Given First Business Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe First Business Financial Services is more favorable than Wintrust Financial.

Profitability

This table compares Wintrust Financial and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wintrust Financial	18.85%	13.05%	1.21%
First Business Financial Services	17.59%	14.22%	1.17%

Dividends

Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.2%. Wintrust Financial pays out 18.4% of its earnings in the form of a dividend. First Business Financial Services pays out 19.1% 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. Wintrust Financial has increased its dividend for 12 consecutive years and First Business Financial Services has increased its dividend for 13 consecutive years. First Business Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

93.5% of Wintrust Financial shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 1.0% of Wintrust Financial shares are held by company insiders. Comparatively, 5.1% of First Business Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Wintrust Financial beats First Business Financial Services on 12 of the 18 factors compared between the two stocks.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.