Financial Contrast: Wells Fargo & Company (NYSE:WFC) versus Dime Community Bancshares (NASDAQ:DCOM)

Wells Fargo & Company (NYSE:WFC) and Dime Community Bancshares (NASDAQ:DCOM) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Volatility and Risk

Wells Fargo & Company has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Wells Fargo & Company and Dime Community Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	9	11	0	2.55
Dime Community Bancshares	0	0	3	1	3.25

Wells Fargo & Company currently has a consensus target price of $74.39, suggesting a potential upside of 2.62%. Dime Community Bancshares has a consensus target price of $38.50, suggesting a potential upside of 36.33%. Given Dime Community Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Dime Community Bancshares is more favorable than Wells Fargo & Company.

Dividends

Wells Fargo & Company pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Wells Fargo & Company pays out 29.7% of its earnings in the form of a dividend. Dime Community Bancshares pays out 169.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

75.9% of Wells Fargo & Company shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 0.1% of Wells Fargo & Company shares are held by company insiders. Comparatively, 9.1% of Dime Community Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Wells Fargo & Company and Dime Community Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$82.30 billion	2.90	$19.72 billion	$5.38	13.48
Dime Community Bancshares	$314.10 million	3.92	$29.08 million	$0.59	47.86

Wells Fargo & Company has higher revenue and earnings than Dime Community Bancshares. Wells Fargo & Company 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.

Profitability

This table compares Wells Fargo & Company and Dime Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wells Fargo & Company	15.73%	12.38%	1.04%
Dime Community Bancshares	4.50%	5.43%	0.46%

Summary

Wells Fargo & Company beats Dime Community Bancshares on 10 of the 17 factors compared between the two stocks.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.

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.