Banc of California (NYSE:BANC) and Webster Financial (NYSE:WBS) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.
This table compares Banc of California and Webster Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Banc of California||23.60%||10.55%||0.95%|
97.1% of Banc of California shares are held by institutional investors. Comparatively, 90.6% of Webster Financial shares are held by institutional investors. 9.9% of Banc of California shares are held by company insiders. Comparatively, 0.8% of Webster Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Risk & Volatility
Banc of California has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Webster Financial has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Banc of California and Webster Financial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Banc of California||0||2||4||0||2.67|
Banc of California currently has a consensus target price of $20.79, indicating a potential upside of 19.87%. Webster Financial has a consensus target price of $56.09, indicating a potential upside of 18.56%. Given Banc of California’s higher possible upside, analysts plainly believe Banc of California is more favorable than Webster Financial.
Valuation and Earnings
This table compares Banc of California and Webster Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banc of California||$309.13 million||2.85||$12.57 million||$0.40||43.35|
|Webster Financial||$1.29 billion||3.33||$220.62 million||$2.78||17.02|
Webster Financial has higher revenue and earnings than Banc of California. Webster Financial is trading at a lower price-to-earnings ratio than Banc of California, indicating that it is currently the more affordable of the two stocks.
Banc of California pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 3.4%. Banc of California pays out 60.0% of its earnings in the form of a dividend. Webster Financial pays out 57.6% 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. Banc of California has increased its dividend for 1 consecutive years and Webster Financial has increased its dividend for 1 consecutive years. Webster Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Webster Financial beats Banc of California on 11 of the 16 factors compared between the two stocks.
Banc of California Company Profile
Banc of California, Inc. is a holding company, which engages in the provision of commercial banking services. It offers personal banking, business and commercial banking, real estate banking, and private banking. The company was founded in March 2002 and is headquartered in Santa Ana, CA.
Webster Financial Company Profile
Webster Financial Corp., is holding company, which engages in the provision of financial services to individuals, families, and businesses. It operates through the following business segments: Commercial Banking, HSA Bank, and Community Banking. The Commercial Banking segment includes commercial banking and private banking. The HSA Bank segment offers comprehensive consumer directed healthcare solutions. The Community Banking segment comprises personal and business banking. The company was founded in 1986 and is headquartered in Waterbury, CT.
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