Critical Review: Wintrust Financial (NASDAQ:WTFC) versus Peoples Financial (OTCMKTS:PFBX)

Wintrust Financial (NASDAQ:WTFC) and Peoples Financial (OTCMKTS:PFBX) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Risk & Volatility

Wintrust Financial has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Earnings and Valuation

This table compares Wintrust Financial and Peoples Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wintrust Financial	$3.97 billion	2.16	$695.04 million	$10.31	12.49
Peoples Financial	$39.52 million	2.23	$21.70 million	$4.66	4.10

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

Dividends

Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Wintrust Financial pays out 19.4% of its earnings in the form of a dividend. Peoples Financial pays out 7.7% 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. Wintrust Financial has increased its dividend for 12 consecutive years. Peoples Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Wintrust Financial	17.52%	12.60%	1.13%
Peoples Financial	54.68%	26.99%	2.51%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Wintrust Financial and Peoples Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wintrust Financial	0	2	9	2	3.00
Peoples Financial	0	0	0	0	0.00

Wintrust Financial presently has a consensus target price of $133.69, indicating a potential upside of 3.78%. Given Wintrust Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Wintrust Financial is more favorable than Peoples Financial.

Insider and Institutional Ownership

93.5% of Wintrust Financial shares are owned by institutional investors. Comparatively, 32.8% of Peoples Financial shares are owned by institutional investors. 1.5% of Wintrust Financial shares are owned by insiders. Comparatively, 28.1% of Peoples Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Wintrust Financial beats Peoples Financial on 11 of the 18 factors compared between the two stocks.

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.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.