Financial Survey: WaFd (NASDAQ:WAFD) versus S&T Bancorp (NASDAQ:STBA)

WaFd (NASDAQ:WAFD) and S&T Bancorp (NASDAQ:STBA) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Volatility and Risk

WaFd has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, S&T Bancorp has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Profitability

This table compares WaFd and S&T Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	18.04%	9.37%	0.93%
S&T Bancorp	24.51%	9.74%	1.42%

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.8%. S&T Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.0%. WaFd pays out 33.6% of its earnings in the form of a dividend. S&T Bancorp pays out 39.4% 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. WaFd has increased its dividend for 2 consecutive years and S&T Bancorp has increased its dividend for 13 consecutive years. WaFd is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings for WaFd and S&T Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	0	1	2.40
S&T Bancorp	0	6	2	0	2.25

WaFd currently has a consensus price target of $32.50, suggesting a potential upside of 14.64%. S&T Bancorp has a consensus price target of $51.60, suggesting a potential upside of 5.61%. Given WaFd’s stronger consensus rating and higher possible upside, analysts clearly believe WaFd is more favorable than S&T Bancorp.

Institutional & Insider Ownership

83.7% of WaFd shares are owned by institutional investors. Comparatively, 65.2% of S&T Bancorp shares are owned by institutional investors. 1.5% of WaFd shares are owned by company insiders. Comparatively, 1.2% of S&T Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares WaFd and S&T Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$813.44 million	2.58	$255.87 million	$3.21	8.83
S&T Bancorp	$415.61 million	4.15	$134.23 million	$3.76	12.99

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

Summary

WaFd beats S&T Bancorp on 10 of the 18 factors compared between the two stocks.

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.

About S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.