Head to Head Review: Washington Trust Bancorp (NASDAQ:WASH) & Penns Woods Bancorp (NASDAQ:PWOD)

Washington Trust Bancorp (NASDAQ:WASH) and Penns Woods Bancorp (NASDAQ:PWOD) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Institutional and Insider Ownership

68.5% of Washington Trust Bancorp shares are owned by institutional investors. Comparatively, 25.3% of Penns Woods Bancorp shares are owned by institutional investors. 1.4% of Washington Trust Bancorp shares are owned by company insiders. Comparatively, 4.0% of Penns Woods Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Washington Trust Bancorp and Penns Woods Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Washington Trust Bancorp	13.19%	10.53%	0.68%
Penns Woods Bancorp	16.61%	9.34%	0.78%

Earnings and Valuation

This table compares Washington Trust Bancorp and Penns Woods Bancorp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Washington Trust Bancorp	$364.80 million	1.15	$48.18 million	$2.81	8.73
Penns Woods Bancorp	$99.97 million	1.40	$16.61 million	$2.31	8.09

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

Volatility and Risk

Washington Trust Bancorp has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Penns Woods Bancorp has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Dividends

Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 9.1%. Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 6.8%. Washington Trust Bancorp pays out 79.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Penns Woods Bancorp pays out 55.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Washington Trust Bancorp and Penns Woods Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Washington Trust Bancorp	1	1	0	0	1.50
Penns Woods Bancorp	0	0	0	0	N/A

Summary

Washington Trust Bancorp beats Penns Woods Bancorp on 8 of the 13 factors compared between the two stocks.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents' estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

About Penns Woods Bancorp

Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. It accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking and individual retirement account (IRAs) accounts. The company also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as construction and residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, it provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Further, the company engages in real estate transactions and investment activities. It operates through a network of offices located in Clinton, Lycoming, Centre, Montour, Union, Blair, and Luzerne Counties, Pennsylvania. Penns Woods Bancorp, Inc. was founded in 1934 and is headquartered in Williamsport, Pennsylvania.