West Bancorporation (NASDAQ:WTBA) versus First Niles Financial (OTCMKTS:FNFI) Critical Contrast

First Niles Financial (OTCMKTS:FNFI) and West Bancorporation (NASDAQ:WTBA) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Volatility and Risk

First Niles Financial has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for First Niles Financial and West Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Niles Financial	0	0	0	0	0.00
West Bancorporation	0	2	0	1	2.67

West Bancorporation has a consensus price target of $24.00, suggesting a potential upside of 11.34%. Given West Bancorporation’s stronger consensus rating and higher probable upside, analysts plainly believe West Bancorporation is more favorable than First Niles Financial.

Dividends

First Niles Financial pays an annual dividend of $0.24 per share and has a dividend yield of 3.0%. West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. First Niles Financial pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. West Bancorporation pays out 52.6% of its earnings in the form of a dividend. West Bancorporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares First Niles Financial and West Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Niles Financial	$12.49 million	0.99	$860,000.00	$0.06	133.33
West Bancorporation	$92.05 million	3.97	$24.05 million	$1.90	11.34

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

Profitability

This table compares First Niles Financial and West Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Niles Financial	N/A	N/A	N/A
West Bancorporation	16.04%	13.40%	0.80%

Institutional and Insider Ownership

44.3% of West Bancorporation shares are held by institutional investors. 23.4% of First Niles Financial shares are held by company insiders. Comparatively, 4.6% of West Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

West Bancorporation beats First Niles Financial on 14 of the 16 factors compared between the two stocks.

About First Niles Financial

First Niles Financial, Inc. operates as a holding company for the Home Federal Savings and Loan Association of Niles that provides various banking products and services in Ohio, the United States. The company offers personal and business checking and savings, money market deposit, and Christmas club accounts, as well as certificates of deposit. It also provides various loans, including mortgage and consumer loans, home equity lines of credit, and commercial loans and lines of credit. In addition, the company provides e-statement, and night depository services; debit and ATM cards; safe deposit boxes; direct deposits; I.R.A. certificates of deposit and savings accounts; and online banking services. First Niles Financial, Inc. was founded in 1897 and is based in Niles, Ohio.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.