Contrasting Wells Fargo & Company (NYSE:WFC) & Chesapeake Financial Shares (OTCMKTS:CPKF)

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

Profitability

This table compares Wells Fargo & Company and Chesapeake Financial Shares’ 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%
Chesapeake Financial Shares	11.50%	10.69%	0.74%

Valuation and Earnings

This table compares Wells Fargo & Company and Chesapeake Financial Shares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$82.30 billion	3.10	$19.72 billion	$5.38	14.24
Chesapeake Financial Shares	$99.39 million	0.91	$11.43 million	$2.42	7.93

Wells Fargo & Company has higher revenue and earnings than Chesapeake Financial Shares. Chesapeake Financial Shares is trading at a lower price-to-earnings ratio than Wells Fargo & Company, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Wells Fargo & Company has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Chesapeake Financial Shares has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Wells Fargo & Company and Chesapeake Financial Shares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	10	10	0	2.50
Chesapeake Financial Shares	0	0	0	0	0.00

Wells Fargo & Company presently has a consensus target price of $73.39, indicating a potential downside of 4.19%. Given Wells Fargo & Company’s stronger consensus rating and higher possible upside, equities analysts clearly believe Wells Fargo & Company is more favorable than Chesapeake Financial Shares.

Dividends

Wells Fargo & Company pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Chesapeake Financial Shares pays an annual dividend of $0.64 per share and has a dividend yield of 3.3%. Wells Fargo & Company pays out 29.7% of its earnings in the form of a dividend. Chesapeake Financial Shares pays out 26.4% 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. Chesapeake Financial Shares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

75.9% of Wells Fargo & Company shares are owned by institutional investors. Comparatively, 3.7% of Chesapeake Financial Shares shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by insiders. Comparatively, 39.5% of Chesapeake Financial Shares shares are owned 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.

Summary

Wells Fargo & Company beats Chesapeake Financial Shares on 13 of the 16 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 Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.