Great Western Bancorp (NYSE:GWB) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Risk & Volatility

Great Western Bancorp has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.

Insider & Institutional Ownership

97.0% of Great Western Bancorp shares are owned by institutional investors. Comparatively, 80.7% of Western Alliance Bancorporation shares are owned by institutional investors. 0.4% of Great Western Bancorp shares are owned by insiders. Comparatively, 7.7% of Western Alliance Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Great Western Bancorp and Western Alliance Bancorporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Great Western Bancorp $603.65 million 2.87 $167.37 million $2.94 10.48
Western Alliance Bancorporation $1.29 billion 4.63 $499.17 million $4.84 12.02

Western Alliance Bancorporation has higher revenue and earnings than Great Western Bancorp. Great Western Bancorp is trading at a lower price-to-earnings ratio than Western Alliance Bancorporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Great Western Bancorp and Western Alliance Bancorporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Great Western Bancorp 0 3 2 0 2.40
Western Alliance Bancorporation 0 0 7 0 3.00

Great Western Bancorp presently has a consensus price target of $36.00, indicating a potential upside of 16.81%. Western Alliance Bancorporation has a consensus price target of $57.80, indicating a potential downside of 0.67%. Given Great Western Bancorp’s higher probable upside, research analysts clearly believe Great Western Bancorp is more favorable than Western Alliance Bancorporation.

Profitability

This table compares Great Western Bancorp and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Great Western Bancorp 27.38% 8.77% 1.29%
Western Alliance Bancorporation 38.69% 17.63% 1.99%

Dividends

Great Western Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Western Alliance Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Great Western Bancorp pays out 40.8% of its earnings in the form of a dividend. Western Alliance Bancorporation pays out 20.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Great Western Bancorp has raised its dividend for 4 consecutive years. Great Western Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Western Alliance Bancorporation beats Great Western Bancorp on 13 of the 17 factors compared between the two stocks.

About Great Western Bancorp

Great Western Bancorp, Inc. operates as the bank holding company for Great Western Bank that provides business and agri-business banking, retail banking, and wealth management services in the United States. The company offers noninterest-bearing demand accounts, interest-bearing demand accounts, interest-bearing non-transaction accounts, time deposits, and corporate credit cards. It also provides commercial real estate (CRE) loans, including owner-occupied and non-owner-occupied CRE loans, multifamily residential real estate loans, and construction and development loans; commercial non-real estate loans, such as working capital and other shorter-term lines of credit, and fixed-rate loans; short-term working capital funding, long-term land-related lending, and other tailored services to agri-businesses; and residential mortgage, home equity, auto, and other loans, as well as home equity and general lines of credit. In addition, the company offers wealth management solutions comprising financial planning, private banking, investment management, and trust services; cash management, online business deposit, and wire transfer services; crop insurance; and online, telephone, and mobile banking services. It primarily serves hospitality/tourism, agri-business, freight and transport, and healthcare sectors. As of September 30, 2018, the company's branch network consisted of 174 branch offices located in 130 communities in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota, as well as operated 163 ATMs and 11 company-owned ATMs at off-site locations. Great Western Bancorp, Inc. was founded in 1935 and is headquartered in Sioux Falls, South Dakota.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. The company offers deposit products, including checking accounts, savings accounts, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts. It also offers commercial and industrial loan products, such as working capital lines of credit, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as Internet banking, wire transfers, electronic bill payment and presentment, lock box services, courier, and cash management services. Further, it holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. As of December 31, 2018, the company operated 38 branch locations and 11 loan production offices. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.

Receive News & Ratings for Great Western Bancorp Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Great Western Bancorp and related companies with MarketBeat.com's FREE daily email newsletter.