Critical Contrast: FS Bancorp (NASDAQ:FSBW) vs. Sumitomo Mitsui Trust (OTCMKTS:SUTNY)

FS Bancorp (NASDAQ:FSBW) and Sumitomo Mitsui Trust (OTCMKTS:SUTNY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Dividends

FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.6%. Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 1.9%. FS Bancorp pays out 26.7% of its earnings in the form of a dividend. Sumitomo Mitsui Trust pays out 23.3% 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. FS Bancorp has raised its dividend for 12 consecutive years. FS Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares FS Bancorp and Sumitomo Mitsui Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	14.88%	10.86%	1.05%
Sumitomo Mitsui Trust	11.81%	10.45%	0.45%

Analyst Recommendations

This is a breakdown of recent recommendations for FS Bancorp and Sumitomo Mitsui Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	0	3	1	0	2.25
Sumitomo Mitsui Trust	0	1	0	0	2.00

FS Bancorp presently has a consensus price target of $45.00, suggesting a potential upside of 0.83%. Given FS Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe FS Bancorp is more favorable than Sumitomo Mitsui Trust.

Insider and Institutional Ownership

63.9% of FS Bancorp shares are owned by institutional investors. 12.9% of FS Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares FS Bancorp and Sumitomo Mitsui Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$219.52 million	1.51	$33.35 million	$4.34	10.28
Sumitomo Mitsui Trust	$19.82 billion	1.51	$1.99 billion	$0.43	12.42

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

Summary

FS Bancorp beats Sumitomo Mitsui Trust on 12 of the 16 factors compared between the two stocks.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

About Sumitomo Mitsui Trust

Sumitomo Mitsui Trust Holdings, Inc. operates as a trust bank in Japan and internationally. It offers supervising services for management strategies, and financial and human resource management; and general affairs, business process, corporate administration, operational process, risk, and compliance management services; and internal auditing services. The company also provides real estate brokerage, investment management, and investment advisory services for individual and corporate clients; high-level professional consulting services; loan guarantees and payment collection agency services; issuing credit cards; internet banking; securities administration and credit card services; and advanced financial instruments, such as leasing and credit services, and credit card financing services, as well as mortgage loans and managing private equity funds and related advisory services. In addition, it offers back-office services, such as business management and system administration for stock transfer agencies; clerical works, including managing shareholders registry and special accounts; custody and fund administration services; stock transfer agency services; asset management services; and retail total solution, marketing, and fiduciary services, as well as system development and maintenance. Further, the company provides facilities management, clerical work outsourcing, and leasing of buildings; consulting services related to digital transformation, data-analytics, and a range of research and studies; and evaluation of mutual funds, discretionary investment funds, and insurance products, as well as engages in trustee and temporary staffing businesses. The company was formerly known as Chuo Mitsui Trust Holdings, Inc. and changed its name to Sumitomo Mitsui Trust Holdings, Inc. in 2011. Sumitomo Mitsui Trust Holdings, Inc. was founded in 1924 and is headquartered in Tokyo, Japan.