Popular (NASDAQ:BPOP) and Regions Financial (NYSE:RF) Critical Contrast

Regions Financial (NYSE:RF) and Popular (NASDAQ:BPOP) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

79.4% of Regions Financial shares are held by institutional investors. Comparatively, 87.3% of Popular shares are held by institutional investors. 0.3% of Regions Financial shares are held by insiders. Comparatively, 2.1% of Popular shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Regions Financial and Popular’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	22.44%	12.55%	1.37%
Popular	18.75%	13.87%	1.10%

Dividends

Regions Financial pays an annual dividend of $1.06 per share and has a dividend yield of 3.6%. Popular pays an annual dividend of $3.00 per share and has a dividend yield of 2.1%. Regions Financial pays out 46.3% of its earnings in the form of a dividend. Popular pays out 24.4% 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. Regions Financial has raised its dividend for 12 consecutive years and Popular has raised its dividend for 6 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Regions Financial has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Popular has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Valuation and Earnings

This table compares Regions Financial and Popular”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.64	$2.16 billion	$2.29	12.82
Popular	$4.44 billion	2.14	$833.16 million	$12.32	11.57

Regions Financial has higher revenue and earnings than Popular. Popular is trading at a lower price-to-earnings ratio than Regions Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Regions Financial and Popular, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	3	8	6	0	2.18
Popular	0	1	10	1	3.00

Regions Financial currently has a consensus price target of $29.84, indicating a potential upside of 1.65%. Popular has a consensus price target of $156.55, indicating a potential upside of 9.85%. Given Popular’s stronger consensus rating and higher probable upside, analysts plainly believe Popular is more favorable than Regions Financial.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About Popular

Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.