Provident Financial Services (NYSE: PFS) and E*TRADE Financial (NASDAQ:ETFC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Valuation & Earnings
This table compares Provident Financial Services and E*TRADE Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Provident Financial Services||$379.54 million||4.86||$93.94 million||$1.52||18.11|
|E*TRADE Financial||$2.37 billion||6.82||$614.00 million||$2.19||27.93|
E*TRADE Financial has higher revenue and earnings than Provident Financial Services. Provident Financial Services is trading at a lower price-to-earnings ratio than E*TRADE Financial, indicating that it is currently the more affordable of the two stocks.
Provident Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. E*TRADE Financial does not pay a dividend. Provident Financial Services pays out 52.6% of its earnings in the form of a dividend. Provident Financial Services has increased its dividend for 7 consecutive years.
Volatility and Risk
Provident Financial Services has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, E*TRADE Financial has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
This table compares Provident Financial Services and E*TRADE Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Provident Financial Services||25.30%||7.89%||1.06%|
Insider and Institutional Ownership
64.4% of Provident Financial Services shares are owned by institutional investors. Comparatively, 93.0% of E*TRADE Financial shares are owned by institutional investors. 3.0% of Provident Financial Services shares are owned by company insiders. Comparatively, 0.1% of E*TRADE Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for Provident Financial Services and E*TRADE Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Provident Financial Services||0||5||1||0||2.17|
Provident Financial Services presently has a consensus target price of $28.10, indicating a potential upside of 2.07%. E*TRADE Financial has a consensus target price of $61.18, indicating a potential upside of 0.03%. Given Provident Financial Services’ higher probable upside, analysts plainly believe Provident Financial Services is more favorable than E*TRADE Financial.
E*TRADE Financial beats Provident Financial Services on 14 of the 18 factors compared between the two stocks.
Provident Financial Services Company Profile
Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA and KEOGH accounts. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides trust and estate administrative services; and asset management services comprising investment management, asset allocation, trust and fiduciary, financial and tax planning, family office, estate settlement, and custody services to individuals, municipalities, non-profits, corporations, and pension funds. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure, as well as offers investment advisory services. As of December 31, 2017, the company operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. Provident Financial Services, Inc. was founded in 1839 and is headquartered in Jersey City, New Jersey.
E*TRADE Financial Company Profile
E*TRADE Financial Corporation, a financial services company, provides brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand. It also offers investor-focused banking products, primarily sweep deposits to retail investors; Federal Deposit Insurance Corporation insurance services; clearing and settlement services; investment advisory services; and financial corporate services, such as software and services for managing equity compensation plans to its corporate clients. The company provides its services to customers through digital platforms; and a network of industry-licensed customer service representatives and financial consultants through phone, email, and online at two national financial centers, as well as in person through 30 regional financial centers in the United States. E*TRADE Financial Corporation was founded in 1982 and is headquartered in New York, New York.
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