Head to Head Contrast: Bank of N.T. Butterfield & Son (NYSE:NTB) & VersaBank (NASDAQ:VBNK)

Bank of N.T. Butterfield & Son (NYSE:NTB) and VersaBank (NASDAQ:VBNK) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Volatility & Risk

Bank of N.T. Butterfield & Son has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Bank of N.T. Butterfield & Son and VersaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of N.T. Butterfield & Son	28.27%	21.94%	1.65%
VersaBank	9.33%	7.02%	0.69%

Dividends

Bank of N.T. Butterfield & Son pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.5%. Bank of N.T. Butterfield & Son pays out 37.9% of its earnings in the form of a dividend. VersaBank pays out 10.8% 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.

Analyst Ratings

This is a summary of recent recommendations for Bank of N.T. Butterfield & Son and VersaBank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of N.T. Butterfield & Son	0	2	2	1	2.80
VersaBank	0	4	1	0	2.20

Bank of N.T. Butterfield & Son presently has a consensus target price of $50.67, suggesting a potential downside of 1.15%. VersaBank has a consensus target price of $12.13, suggesting a potential downside of 16.03%. Given Bank of N.T. Butterfield & Son’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than VersaBank.

Insider and Institutional Ownership

62.7% of Bank of N.T. Butterfield & Son shares are owned by institutional investors. Comparatively, 56.9% of VersaBank shares are owned by institutional investors. 1.2% of Bank of N.T. Butterfield & Son shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Bank of N.T. Butterfield & Son and VersaBank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of N.T. Butterfield & Son	$815.73 million	2.99	$216.32 million	$5.28	9.71
VersaBank	$217.14 million	2.13	$20.32 million	$0.65	22.23

Bank of N.T. Butterfield & Son has higher revenue and earnings than VersaBank. Bank of N.T. Butterfield & Son is trading at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.

Summary

Bank of N.T. Butterfield & Son beats VersaBank on 14 of the 17 factors compared between the two stocks.

About Bank of N.T. Butterfield & Son

The Bank of N.T. Butterfield & Son Ltd. provides community banking and wealth management business. The firm operates through the following geographical segments: Bermuda, the Cayman Islands, Channel Islands and the UK, and Other. The Bermuda and Cayman segments offer retail banking and wealth management. The Channel Islands and the UK segment refers to the retail and corporate banking and wealth management. The Other segment includes operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. The company was founded in 1858 and is headquartered in Hamilton, Bermuda.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.