Analyzing ECB Bancorp (NASDAQ:ECBK) and Wintrust Financial (NASDAQ:WTFC)

ECB Bancorp (NASDAQ:ECBK) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Risk & Volatility

ECB Bancorp has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Valuation and Earnings

This table compares ECB Bancorp and Wintrust Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ECB Bancorp	$38.81 million	4.47	$7.77 million	$1.37	14.49
Wintrust Financial	$4.23 billion	2.29	$823.84 million	$12.45	11.53

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

Profitability

This table compares ECB Bancorp and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ECB Bancorp	13.19%	6.55%	0.70%
Wintrust Financial	20.72%	13.37%	1.28%

Institutional and Insider Ownership

30.3% of ECB Bancorp shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 10.4% of ECB Bancorp shares are held by insiders. Comparatively, 1.2% of Wintrust Financial shares are held by 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 recent ratings and recommmendations for ECB Bancorp and Wintrust Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ECB Bancorp	0	0	0	1	4.00
Wintrust Financial	0	5	10	0	2.67

Wintrust Financial has a consensus target price of $176.20, indicating a potential upside of 22.75%. Given Wintrust Financial’s higher probable upside, analysts plainly believe Wintrust Financial is more favorable than ECB Bancorp.

Summary

Wintrust Financial beats ECB Bancorp on 10 of the 15 factors compared between the two stocks.

About ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.