Analyzing People’s United Financial (PBCT) and Territorial Bancorp (TBNK)

People’s United Financial (NASDAQ:PBCT) and Territorial Bancorp (NASDAQ:TBNK) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Valuation and Earnings

This table compares People’s United Financial and Territorial Bancorp’s 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 3.20 $337.20 million $1.04 14.61
Territorial Bancorp $72.18 million 3.68 $14.96 million $1.78 15.30



People’s United Financial has higher revenue and earnings than Territorial Bancorp. People’s United Financial is trading at a lower price-to-earnings ratio than Territorial Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

78.5% of People’s United Financial shares are held by institutional investors. Comparatively, 44.2% of Territorial Bancorp shares are held by institutional investors. 2.5% of People’s United Financial shares are held by company insiders. Comparatively, 13.1% of Territorial Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

People’s United Financial has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Territorial Bancorp has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500.

Dividends

People’s United Financial pays an annual dividend of $0.70 per share and has a dividend yield of 4.6%. Territorial Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 3.2%. People’s United Financial pays out 67.3% of its earnings in the form of a dividend. Territorial Bancorp pays out 49.4% 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. People’s United Financial has increased its dividend for 11 consecutive years and Territorial Bancorp has increased its dividend for 5 consecutive years. People’s United Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for People’s United Financial and Territorial Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
People’s United Financial 1 4 2 0 2.14
Territorial Bancorp 0 2 0 0 2.00

People’s United Financial currently has a consensus price target of $20.42, indicating a potential upside of 34.41%. Territorial Bancorp has a consensus price target of $32.00, indicating a potential upside of 17.47%. Given People’s United Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe People’s United Financial is more favorable than Territorial Bancorp.

Profitability

This table compares People’s United Financial and Territorial Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
People’s United Financial 23.98% 7.94% 1.01%
Territorial Bancorp 22.17% 8.03% 0.93%

Summary

People’s United Financial beats Territorial Bancorp on 11 of the 17 factors compared between the two stocks.

People’s United Financial Company Profile

People's United Financial, Inc. operates as the bank holding company for People's United Bank, National Association that provides commercial banking, retail banking, and wealth management services to individual, corporate, and municipal customers. The company operates in two segments, Commercial Banking and Retail Banking. The Commercial Banking segment offers commercial real estate lending, commercial and industrial lending, and commercial deposit gathering services. This segment also provides equipment financing; cash management, correspondent banking, and municipal banking services; and institutional trust, corporate trust, private banking, and insurance services. The Retail Banking segment offers consumer lending, including residential mortgage and home equity lending; and consumer deposit gathering services. This segment also provides brokerage, financial advisory, investment management, life insurance, and non-institutional trust services. In addition, the company offers online banking, investment trading, and telephone banking services. It operates through a network of 403 branches, including 147 full-service stop and shop supermarket branches located in Connecticut, southeastern New York, Massachusetts, Vermont, Maine, and New Hampshire, as well as 598 ATMs. People's United Financial, Inc. was founded in 1842 and is headquartered in Bridgeport, Connecticut.

Territorial Bancorp Company Profile

Territorial Bancorp Inc. operates as the holding company for Territorial Savings Bank that provides various financial services to individuals, families, and businesses. The company offers a range of deposit accounts, including passbook and statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and NOW accounts. It also provides various loan products comprising one- to four-family residential mortgage loans; home equity loans and lines of credit; construction, commercial, and other non-residential real estate loans; consumer loans; multi-family mortgage loans; commercial business loans; and other loans, as well as offers investment securities. In addition, the company, through its subsidiary, Territorial Financial Services, Inc. engages in insurance agency activities. Further, it provides various non-deposit investments, including annuities and mutual funds through a third-party broker-dealer. The company operates through a network of 29 full-service branches located in the State of Hawaii. Territorial Bancorp Inc. was founded in 1921 and is based in Honolulu, Hawaii.

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