People's United Financial (NASDAQ: PBCT) and Northrim BanCorp (NASDAQ:NRIM) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.
Institutional & Insider Ownership
76.2% of People's United Financial shares are owned by institutional investors. Comparatively, 70.5% of Northrim BanCorp shares are owned by institutional investors. 2.5% of People's United Financial shares are owned by insiders. Comparatively, 2.9% of Northrim BanCorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares People's United Financial and Northrim BanCorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|People's United Financial||20.37%||6.69%||0.84%|
Valuation and Earnings
This table compares People's United Financial and Northrim BanCorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|People's United Financial||$1.66 billion||3.93||$337.20 million||$1.04||18.04|
|Northrim BanCorp||$100.58 million||2.44||$13.15 million||$2.04||17.52|
People's United Financial has higher revenue and earnings than Northrim BanCorp. Northrim BanCorp is trading at a lower price-to-earnings ratio than People's United Financial, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
People's United Financial has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Northrim BanCorp has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.
People's United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 3.7%. Northrim BanCorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.7%. People's United Financial pays out 66.3% of its earnings in the form of a dividend. Northrim BanCorp pays out 47.1% 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. People's United Financial has increased its dividend for 11 consecutive years. People's United Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and target prices for People's United Financial and Northrim BanCorp, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|People's United Financial||2||5||0||0||1.71|
People's United Financial currently has a consensus price target of $19.82, indicating a potential upside of 5.66%. Given People's United Financial’s higher probable upside, analysts clearly believe People's United Financial is more favorable than Northrim BanCorp.
People's United Financial beats Northrim BanCorp on 10 of the 15 factors compared between the two stocks.
People's United Financial Company Profile
People’s United Financial, Inc. is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.
Northrim BanCorp Company Profile
Northrim BanCorp, Inc. is a bank holding company. The Company operates in two segments: Community Banking and Home Mortgage Lending. The Community Banking segment’s principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. The Community Banking segment operates approximately 10 branches throughout Alaska. The Home Mortgage Lending segment’s principal business focus is the origination and sale of mortgage loans for one- to four-family residential properties. Its loan products include short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans. Its commercial loan portfolio includes both secured and unsecured loans for working capital and expansion. It provides construction lending for commercial real estate projects. It offers personal loans for automobiles, recreational vehicles, boats, and other larger consumer purchases.
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