Financial Analysis: WSFS Financial (NASDAQ:WSFS) vs. Dime Community Bancshares (NASDAQ:DCOM)

Dime Community Bancshares (NASDAQ:DCOM) and WSFS Financial (NASDAQ:WSFS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Risk & Volatility

Dime Community Bancshares has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, WSFS Financial has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Dividends

Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. WSFS Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. Dime Community Bancshares pays out 66.7% of its earnings in the form of a dividend. WSFS Financial pays out 13.7% 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Dime Community Bancshares and WSFS Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dime Community Bancshares	0	1	2	1	3.00
WSFS Financial	0	3	2	0	2.40

Dime Community Bancshares presently has a consensus price target of $29.50, indicating a potential downside of 12.46%. WSFS Financial has a consensus price target of $59.75, indicating a potential upside of 3.97%. Given WSFS Financial’s higher possible upside, analysts clearly believe WSFS Financial is more favorable than Dime Community Bancshares.

Valuation & Earnings

This table compares Dime Community Bancshares and WSFS Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dime Community Bancshares	$645.57 million	2.04	$96.09 million	$1.50	22.47
WSFS Financial	$1.27 billion	2.67	$269.16 million	$4.38	13.12

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

Insider and Institutional Ownership

75.3% of Dime Community Bancshares shares are held by institutional investors. Comparatively, 88.5% of WSFS Financial shares are held by institutional investors. 9.1% of Dime Community Bancshares shares are held by insiders. Comparatively, 1.3% of WSFS Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Dime Community Bancshares and WSFS Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dime Community Bancshares	9.65%	5.58%	0.46%
WSFS Financial	18.78%	10.56%	1.29%

Summary

WSFS Financial beats Dime Community Bancshares on 11 of the 16 factors compared between the two stocks.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.