SunTrust Banks (NYSE:STI) and OptimumBank (NASDAQ:OPHC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
This table compares SunTrust Banks and OptimumBank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
84.1% of SunTrust Banks shares are held by institutional investors. Comparatively, 0.0% of OptimumBank shares are held by institutional investors. 0.5% of SunTrust Banks shares are held by company insiders. Comparatively, 11.4% of OptimumBank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a summary of current ratings and target prices for SunTrust Banks and OptimumBank, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
SunTrust Banks presently has a consensus price target of $74.71, indicating a potential upside of 22.81%. Given SunTrust Banks’ higher probable upside, analysts clearly believe SunTrust Banks is more favorable than OptimumBank.
SunTrust Banks pays an annual dividend of $2.00 per share and has a dividend yield of 3.3%. OptimumBank does not pay a dividend. SunTrust Banks pays out 49.5% of its earnings in the form of a dividend. SunTrust Banks has increased its dividend for 5 consecutive years.
Valuation and Earnings
This table compares SunTrust Banks and OptimumBank’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SunTrust Banks||$9.74 billion||2.88||$2.27 billion||$4.04||15.06|
SunTrust Banks has higher revenue and earnings than OptimumBank.
Volatility & Risk
SunTrust Banks has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, OptimumBank has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
SunTrust Banks beats OptimumBank on 9 of the 14 factors compared between the two stocks.
SunTrust Banks Company Profile
SunTrust Banks, Inc. operates as the holding company for SunTrust Bank that provides various financial services for consumers, businesses, corporations, and institutions in the United States. It operates through two segments, Consumer and Wholesale. The Consumer segment provides deposits and payments; home equity and personal credit lines; auto, student, and other lending products; credit cards; discount/online and full-service brokerage products; professional investment advisory products and services; and trust services, as well as family office solutions. This segment also offers residential mortgage products in the secondary market. The Wholesale segment provides capital markets solutions, including advisory, capital raising, and financial risk management, as well as lease financing solutions; cash management services and auto dealer financing solutions; and construction, mini-perm, and permanent real estate financing, as well as tailored financing and equity investment solutions. This segment also offers treasury and payment solutions, such as operating various electronic and paper payment types, which comprise card, wire transfer, automated clearing house, check, and cash; and provides services clients to manage their accounts online. The company offers its products and services through a network of traditional and in-store branches, automated teller machines, Internet, mobile, and telephone banking channels. As of December 31, 2017, it operated 1,268 full-service banking offices located in Florida, Georgia, Virginia, North Carolina, Tennessee, Maryland, South Carolina, and the District of Columbia. SunTrust Banks, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.
OptimumBank Company Profile
OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides a range of consumer and commercial banking services to individuals and businesses. The company accepts demand interest-bearing and noninterest-bearing, savings, money market, NOW, and time deposit accounts, as well as certificates of deposit; and offers residential and commercial real estate, commercial, and consumer loans, as well as lending lines for working capital needs. It also provides debit and ATM cards; investment, cash management, and notary and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, drive-in tellers, and banking by mail, as well as Internet banking services. In addition, the company engages in holding, managing, and disposing foreclosed real estate. It operates through three banking offices located in Broward County, Florida. OptimumBank Holdings, Inc. was founded in 2000 and is based in Fort Lauderdale, Florida.
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