Comparing Washington Federal (WAFD) and Arrow Financial (AROW)

Washington Federal (NASDAQ: WAFD) and Arrow Financial (NASDAQ:AROW) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Washington Federal and Arrow Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Federal 30.61% 9.53% 1.24%
Arrow Financial 27.17% 12.21% 1.09%

Dividends

Washington Federal pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. Arrow Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Washington Federal pays out 35.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and target prices for Washington Federal and Arrow Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Federal 0 4 0 0 2.00
Arrow Financial 0 1 0 0 2.00

Washington Federal presently has a consensus price target of $36.25, indicating a potential upside of 12.58%. Arrow Financial has a consensus price target of $37.00, indicating a potential downside of 1.73%. Given Washington Federal’s higher possible upside, analysts clearly believe Washington Federal is more favorable than Arrow Financial.

Earnings & Valuation

This table compares Washington Federal and Arrow Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Washington Federal $601.13 million 4.52 $173.53 million $1.94 16.60
Arrow Financial $112.30 million 4.68 $29.32 million N/A N/A

Washington Federal has higher revenue and earnings than Arrow Financial.

Insider and Institutional Ownership

86.5% of Washington Federal shares are owned by institutional investors. Comparatively, 40.3% of Arrow Financial shares are owned by institutional investors. 1.1% of Washington Federal shares are owned by company insiders. Comparatively, 4.4% of Arrow Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Washington Federal has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Arrow Financial has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Summary

Washington Federal beats Arrow Financial on 7 of the 13 factors compared between the two stocks.

About Washington Federal

Washington Federal, Inc. operates as the bank holding company for Washington Federal, National Association that provides lending, depository, insurance, and other banking services to consumers, mid-sized and large businesses, and owners and developers of commercial real estate in the United States. The company accepts deposit products, such as business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also offers single-family residential, construction, land acquisition and development, multi-family residential, commercial and industrial, home equity, and business loans. In addition, the company is involved insurance brokerage activities. As of September 30, 2017, it had 237 branches located in Washington, Oregon, Idaho, Arizona, Utah, Nevada, New Mexico, and Texas. Washington Federal, Inc. was founded in 1917 and is headquartered in Seattle, Washington.

About Arrow Financial

Arrow Financial Corporation, a multi-bank holding company, provides commercial and consumer banking, and financial products and services. Its deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. The company's lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. Its lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, as well as fixed home equity loans and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, the company maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, it provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, the company offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. The company owns 29 branch banking offices; and leases 11 branch banking offices, as well as 2 residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

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