Financial Analysis: Hawthorn Bancshares (NASDAQ:HWBK) vs. WaFd (NASDAQ:WAFD)

Hawthorn Bancshares (NASDAQ:HWBK) and WaFd (NASDAQ:WAFD) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Profitability

This table compares Hawthorn Bancshares and WaFd’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hawthorn Bancshares	5.67%	4.54%	0.34%
WaFd	13.97%	9.44%	0.87%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Hawthorn Bancshares and WaFd, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawthorn Bancshares	0	0	0	0	N/A
WaFd	0	3	1	0	2.25

WaFd has a consensus price target of $38.00, suggesting a potential upside of 11.73%. Given WaFd’s higher probable upside, analysts plainly believe WaFd is more favorable than Hawthorn Bancshares.

Dividends

Hawthorn Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. WaFd pays an annual dividend of $1.04 per share and has a dividend yield of 3.1%. Hawthorn Bancshares pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WaFd pays out 41.9% of its earnings in the form of a dividend. WaFd has increased its dividend for 14 consecutive years. WaFd is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

30.7% of Hawthorn Bancshares shares are held by institutional investors. Comparatively, 83.7% of WaFd shares are held by institutional investors. 23.4% of Hawthorn Bancshares shares are held by insiders. Comparatively, 2.3% of WaFd shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Hawthorn Bancshares has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, WaFd has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hawthorn Bancshares and WaFd”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawthorn Bancshares	$99.50 million	1.95	$960,000.00	$0.90	30.81
WaFd	$1.43 billion	1.93	$200.04 million	$2.48	13.71

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

Summary

WaFd beats Hawthorn Bancshares on 13 of the 16 factors compared between the two stocks.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.