Walter Investment Management Corp. (NYSE: WAC) and WSFS Financial Corporation (NASDAQ:WSFS) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Profitability

This table compares Walter Investment Management Corp. and WSFS Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walter Investment Management Corp. -18.10% -796.24% -0.52%
WSFS Financial Corporation 19.96% 10.44% 1.08%

Dividends

WSFS Financial Corporation pays an annual dividend of $0.28 per share and has a dividend yield of 0.6%. Walter Investment Management Corp. does not pay a dividend. WSFS Financial Corporation pays out 12.7% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Walter Investment Management Corp. and WSFS Financial Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Walter Investment Management Corp. $947.12 million 0.02 -$217.78 million ($5.96) -0.10
WSFS Financial Corporation $307.38 million 5.02 $69.12 million $2.20 22.34

WSFS Financial Corporation has higher revenue, but lower earnings than Walter Investment Management Corp.. Walter Investment Management Corp. is trading at a lower price-to-earnings ratio than WSFS Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Walter Investment Management Corp. has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, WSFS Financial Corporation has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Insider & Institutional Ownership

56.5% of Walter Investment Management Corp. shares are owned by institutional investors. Comparatively, 78.4% of WSFS Financial Corporation shares are owned by institutional investors. 46.6% of Walter Investment Management Corp. shares are owned by company insiders. Comparatively, 4.9% of WSFS Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Walter Investment Management Corp. and WSFS Financial Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walter Investment Management Corp. 1 1 0 0 1.50
WSFS Financial Corporation 0 0 3 0 3.00

Walter Investment Management Corp. currently has a consensus target price of $1.13, suggesting a potential upside of 91.95%. WSFS Financial Corporation has a consensus target price of $51.33, suggesting a potential upside of 4.44%. Given Walter Investment Management Corp.’s higher possible upside, research analysts plainly believe Walter Investment Management Corp. is more favorable than WSFS Financial Corporation.

Summary

WSFS Financial Corporation beats Walter Investment Management Corp. on 11 of the 15 factors compared between the two stocks.

Walter Investment Management Corp. Company Profile

Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.

WSFS Financial Corporation Company Profile

WSFS Financial Corporation is a savings and loan holding company. The Company’s subsidiary is Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), which is the bank and trust company. It operates in three segments: WSFS Bank, Cash Connect and Wealth Management. The WSFS Bank segment provides loans and other financial products to commercial and retail customers. Its Cash Connect segment provides automated teller machine (ATM) services through strategic partnerships with several of the network, manufacturers and service providers in the ATM industry. The Wealth Management segment provides a range of fiduciary, investment management, credit and deposit products to clients. Its banking business is commercial lending funded by customer-generated deposits. It also offers a range of consumer loan products, retail securities and insurance brokerage services. Its subsidiaries include WSFS Wealth Investments, 1832 Holdings, Inc., Monarch and West Capital Management.

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