Contrasting Wintrust Financial (NASDAQ:WTFC) and Pathfinder Bancorp (NASDAQ:PBHC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pathfinder Bancorp	11.16%	7.34%	0.61%
Wintrust Financial	17.02%	12.71%	1.10%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Pathfinder Bancorp and Wintrust Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pathfinder Bancorp	0	0	0	0	N/A
Wintrust Financial	0	2	10	1	2.92

Wintrust Financial has a consensus price target of $118.23, indicating a potential upside of 10.96%. Given Wintrust Financial’s higher probable upside, analysts clearly believe Wintrust Financial is more favorable than Pathfinder Bancorp.

Insider & Institutional Ownership

26.7% of Pathfinder Bancorp shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 22.4% of Pathfinder Bancorp shares are held by company insiders. Comparatively, 1.5% of Wintrust Financial shares are held by company 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 and Volatility

Pathfinder Bancorp has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pathfinder Bancorp	$42.55 million	1.78	$9.29 million	$1.42	11.33
Wintrust Financial	$3.33 billion	2.13	$622.63 million	$9.67	11.02

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

Dividends

Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Wintrust Financial pays an annual dividend of $1.80 per share and has a dividend yield of 1.7%. Pathfinder Bancorp pays out 28.2% of its earnings in the form of a dividend. Wintrust Financial pays out 18.6% 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. Pathfinder Bancorp has raised its dividend for 4 consecutive years and Wintrust Financial has raised its dividend for 11 consecutive years.

Summary

Wintrust Financial beats Pathfinder Bancorp on 14 of the 17 factors compared between the two stocks.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.

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.