SmartFinancial (NASDAQ:SMBK) and Wells Fargo & Co (NYSE:WFC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Insider & Institutional Ownership
35.7% of SmartFinancial shares are held by institutional investors. Comparatively, 71.4% of Wells Fargo & Co shares are held by institutional investors. 12.0% of SmartFinancial shares are held by company insiders. Comparatively, 0.1% of Wells Fargo & Co shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares SmartFinancial and Wells Fargo & Co’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SmartFinancial||$98.76 million||2.84||$18.11 million||$1.55||13.00|
|Wells Fargo & Co||$101.06 billion||2.43||$22.39 billion||$4.38||11.50|
Wells Fargo & Co has higher revenue and earnings than SmartFinancial. Wells Fargo & Co is trading at a lower price-to-earnings ratio than SmartFinancial, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for SmartFinancial and Wells Fargo & Co, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wells Fargo & Co||0||7||11||0||2.61|
SmartFinancial presently has a consensus price target of $25.50, suggesting a potential upside of 26.55%. Wells Fargo & Co has a consensus price target of $61.70, suggesting a potential upside of 22.54%. Given SmartFinancial’s stronger consensus rating and higher probable upside, analysts plainly believe SmartFinancial is more favorable than Wells Fargo & Co.
Risk & Volatility
SmartFinancial has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Wells Fargo & Co has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.
This table compares SmartFinancial and Wells Fargo & Co’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wells Fargo & Co||22.95%||13.34%||1.25%|
Wells Fargo & Co pays an annual dividend of $1.80 per share and has a dividend yield of 3.6%. SmartFinancial does not pay a dividend. Wells Fargo & Co pays out 41.1% of its earnings in the form of a dividend. Wells Fargo & Co has increased its dividend for 7 consecutive years.
Wells Fargo & Co beats SmartFinancial on 11 of the 17 factors compared between the two stocks.
SmartFinancial Company Profile
SmartFinancial, Inc. operates as the bank holding company for the SmartBank that provides various financial services to individuals and corporate customers in the United States. The company offers various deposit products, including interest bearing and non-interest bearing checking accounts, savings accounts, money market accounts, individual retirement accounts, and certificates of deposit. It also provides commercial real estate loans, consumer real estate loans, construction and land development loans, commercial and industrial loans, including commercial, financial, and agricultural loans, and consumer and other loans, such as direct consumer installment loans, overdrafts and other revolving credit loans, and educational loans. In addition, the company offers Internet and mobile banking services. As of December 31, 2017, it operated through 22 full-service branches located in Tennessee, Alabama, and Florida; and 1 loan production office, 2 mortgage loan production offices, and 2 service centers. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.
Wells Fargo & Co Company Profile
Wells Fargo & Company, a diversified financial services company, provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. The company's Community Banking segment offers checking and savings accounts; credit and debit cards; and automobile, student, mortgage, home equity, and small business loans. Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, merchant payment processing, institutional fixed-income sales, commodity and equity risk management, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products. This segment also provides construction, and land acquisition and development loans; secured and unsecured lines of credit; interim financing arrangements; rehabilitation loans; affordable housing loans and letters of credit; loans for securitization; and real estate and mortgage brokerage services. The company's Wealth and Investment Management segment offers financial planning, private banking, credit, and investment management and fiduciary services, as well as retirement and trust services. As of February 7, 2019, it operated through 7,800 locations, 13,000 ATMs, and the Internet and mobile banking, as well as has offices in 37 countries and territories. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.
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