CapitalSource (NYSE: CSE) and Western New England Bancorp (NASDAQ:WNEB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Insider and Institutional Ownership

55.8% of Western New England Bancorp shares are owned by institutional investors. 5.6% of Western New England Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares CapitalSource and Western New England Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CapitalSource N/A N/A N/A
Western New England Bancorp 18.20% 5.99% 0.71%

Analyst Recommendations

This is a summary of current ratings for CapitalSource and Western New England Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CapitalSource 0 0 0 0 N/A
Western New England Bancorp 0 3 0 0 2.00

Western New England Bancorp has a consensus target price of $11.00, suggesting a potential upside of 4.76%.

Dividends

Western New England Bancorp pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. CapitalSource does not pay a dividend. Western New England Bancorp pays out 24.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares CapitalSource and Western New England Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
CapitalSource N/A N/A N/A N/A N/A
Western New England Bancorp $54.57 million 5.93 $4.83 million $0.49 21.43

Western New England Bancorp has higher revenue and earnings than CapitalSource.

Summary

Western New England Bancorp beats CapitalSource on 7 of the 8 factors compared between the two stocks.

CapitalSource Company Profile

CapitalSource Inc. (CapitalSource) is a commercial lender, which provides financial products to small and middle market businesses nationwide and provides depository products and services to consumers in southern and central California, through its wholly owned subsidiary, CapitalSource Bank. As of December 31, 2012, it had 21 retail bank branches located in southern and central California. During the year ended December 31, 2012, it operated as two reportable segments: CapitalSource Bank and Other Commercial Finance. Its CapitalSource Bank segment comprises its commercial lending and banking business activities, and its Other Commercial Finance segment comprises its loan portfolio and other business activities in the Parent Company. In April 2014, PacWest Bancorp merged with CapitalSource Inc.

Western New England Bancorp Company Profile

Western New England Bancorp, Inc., formerly Westfield Financial, Inc., is a Massachusetts-chartered stock holding company. The Company serves as a holding company for Westfield Bank (the Bank). It is a provider of banking products and services to business organizations and individuals, including products such as residential and commercial loans, consumer loans and a variety of deposit products. It focuses on residential real estate lending, as well as servicing commercial customers, including commercial and industrial lending and commercial deposit relationships. In addition, it provides online banking services. It operates through over 21 banking offices located in Agawam, Chicopee, East Longmeadow, Feeding Hills, Holyoke, Ludlow, Southwick, Springfield, Ware, West Springfield and Westfield, Massachusetts, and Granby and Enfield, Connecticut. It also has over 10 automated teller machine (ATM) locations in Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts.

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