Contrasting NBT Bancorp (NASDAQ:NBTB) & PacWest Bancorp (NASDAQ:PACW)

NBT Bancorp (NASDAQ:NBTB) and PacWest Bancorp (NASDAQ:PACW) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Institutional & Insider Ownership

54.0% of NBT Bancorp shares are owned by institutional investors. Comparatively, 82.4% of PacWest Bancorp shares are owned by institutional investors. 3.3% of NBT Bancorp shares are owned by insiders. Comparatively, 1.4% of PacWest Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares NBT Bancorp and PacWest Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NBT Bancorp 19.96% 8.73% 0.96%
PacWest Bancorp -98.27% 6.14% 0.86%

Dividends

NBT Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.8%. PacWest Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. NBT Bancorp pays out 39.4% of its earnings in the form of a dividend. PacWest Bancorp pays out 25.6% 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. NBT Bancorp has increased its dividend for 1 consecutive years and PacWest Bancorp has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NBT Bancorp and PacWest Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NBT Bancorp 0 2 0 0 2.00
PacWest Bancorp 0 2 5 0 2.71

NBT Bancorp presently has a consensus target price of $32.50, indicating a potential downside of 16.67%. PacWest Bancorp has a consensus target price of $29.13, indicating a potential downside of 26.95%. Given NBT Bancorp’s higher possible upside, equities analysts plainly believe NBT Bancorp is more favorable than PacWest Bancorp.

Risk & Volatility

NBT Bancorp has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, PacWest Bancorp has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Valuation and Earnings

This table compares NBT Bancorp and PacWest Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NBT Bancorp $511.56 million 3.32 $121.02 million $2.74 14.23
PacWest Bancorp $1.36 billion 3.42 $468.64 million $3.90 10.22

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

Summary

PacWest Bancorp beats NBT Bancorp on 9 of the 16 factors compared between the two stocks.

NBT Bancorp Company Profile

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises commercial and industrial, commercial real estate, agricultural, and commercial construction loans; indirect and direct consumer, home equity, mortgages, business banking loans, and commercial loans; and residential real estate loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan consulting and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. As of December 31, 2020, it had 141 branches and 176 ATMs in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, and Maine. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.

PacWest Bancorp Company Profile

PacWest Bancorp operates as the bank holding company for Pacific Western Bank that provides various banking products and services. The company accepts demand, money market, and time deposits. It also provides real estate loans to professional developers and real estate investors for the acquisition, refinancing, renovation, and construction of commercial real estate properties; small business administration loans; asset-based loans for working capital needs; venture capital loans to support the operations of entrepreneurial and venture-backed companies; and equipment-secured loans and leases. In addition, the company offers consumer loans comprising personal loans, auto loans, home equity lines of credit, revolving lines of credit, and other loans. Further, it provides international banking and multi-state deposit services; money market sweep products; investment advisory and asset management services; treasury and cash management services; telephone banking, remote deposit, and online and mobile banking services; and automated teller machine services. The company offers its products and services to small and mid-sized companies, venture capital and private equity investors, professionals, and other individuals. It operates through 70 full-service branches located in California; one branch located in Durham, North Carolina; one branch located in Denver, Colorado; and various loan production offices. The company was formerly known as First Community Bancorp and changed its name to PacWest Bancorp in April 2008. PacWest Bancorp was founded in 1999 and is headquartered in Beverly Hills, California.

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