Waterstone Financial (NASDAQ:WSBF – Get Rating) and Catalyst Bancorp (NASDAQ:CLST – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.
Profitability
This table compares Waterstone Financial and Catalyst Bancorp's net margins, return on equity and return on assets.
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| Net Margins | Return on Equity | Return on Assets |
| Waterstone Financial | 11.08% | 4.98% | 0.99% |
| Catalyst Bancorp | 2.14% | 0.21% | 0.07% |
Institutional and Insider Ownership
54.5% of Waterstone Financial shares are held by institutional investors. Comparatively, 20.0% of Catalyst Bancorp shares are held by institutional investors. 6.7% of Waterstone Financial shares are held by company insiders. Comparatively, 3.6% of Catalyst Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Waterstone Financial and Catalyst Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
| Waterstone Financial | 0 | 0 | 0 | 0 | N/A |
| Catalyst Bancorp | 0 | 0 | 0 | 0 | N/A |
Earnings and Valuation
This table compares Waterstone Financial and Catalyst Bancorp's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
| Waterstone Financial | $175.80 million | 2.00 | $70.79 million | $0.88 | 17.98 |
| Catalyst Bancorp | $9.19 million | 7.45 | $1.93 million | $0.05 | 259.05 |
Waterstone Financial has higher revenue and earnings than Catalyst Bancorp. Waterstone Financial is trading at a lower price-to-earnings ratio than Catalyst Bancorp, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Waterstone Financial has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Catalyst Bancorp has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.
Summary
Waterstone Financial beats Catalyst Bancorp on 9 of the 11 factors compared between the two stocks.
About Waterstone Financial
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Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. The company also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. It operates 14 full-service banking offices, 1 drive-through office, and 14 automated teller machines located in Milwaukee, Washington, and Waukesha Counties, Wisconsin. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. Waterstone Financial, Inc. was founded in 1921 and is based in Wauwatosa, Wisconsin.
About Catalyst Bancorp
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Catalyst Bancorp, Inc. operates as a holding company for Catalyst Bank that provides commercial and retail banking products. The company accepts various deposit products, including savings accounts, demand and NOW accounts, money market accounts, and certificates of deposit. It also offers single-family residential first mortgage loans, commercial real estate mortgage loans, multi-family residential mortgage loans, commercial and industrial loans, construction and land loans, consumer loans, and other loans. In addition, the company invests in various types of securities comprising mortgage-backed securities, the U.S. treasury obligations, securities of various federal agencies and of state and municipal governments, certificates of deposit at federally insured banks and savings institutions, and federal funds. It operates through six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. The company was founded in 1922 and is headquartered in Opelousas, Louisiana.
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