Critical Contrast: Wells Fargo & Company (NYSE:WFC) and Carter Bankshares (NASDAQ:CARE)

Carter Bankshares (NASDAQ:CARE) and Wells Fargo & Company (NYSE:WFC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.

Volatility and Risk

Carter Bankshares has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Wells Fargo & Company has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Profitability

This table compares Carter Bankshares and Wells Fargo & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carter Bankshares	6.07%	4.17%	0.33%
Wells Fargo & Company	14.43%	12.25%	1.04%

Institutional & Insider Ownership

41.5% of Carter Bankshares shares are owned by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are owned by institutional investors. 1.9% of Carter Bankshares shares are owned by company insiders. Comparatively, 0.1% of Wells Fargo & Company shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Carter Bankshares and Wells Fargo & Company”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter Bankshares	$127.61 million	3.34	$23.19 million	$0.62	29.81
Wells Fargo & Company	$82.40 billion	2.86	$19.14 billion	$4.81	14.72

Wells Fargo & Company has higher revenue and earnings than Carter Bankshares. Wells Fargo & Company is trading at a lower price-to-earnings ratio than Carter Bankshares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Carter Bankshares and Wells Fargo & Company, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter Bankshares	0	0	2	0	3.00
Wells Fargo & Company	0	12	9	1	2.50

Carter Bankshares currently has a consensus target price of $21.50, suggesting a potential upside of 16.34%. Wells Fargo & Company has a consensus target price of $67.49, suggesting a potential downside of 4.67%. Given Carter Bankshares’ stronger consensus rating and higher probable upside, equities analysts plainly believe Carter Bankshares is more favorable than Wells Fargo & Company.

Summary

Wells Fargo & Company beats Carter Bankshares on 10 of the 15 factors compared between the two stocks.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.

About Wells Fargo & Company

Wells Fargo & Company, a financial services company, provides diversified banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally. The company operates through four segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. The Consumer Banking and Lending segment offers diversified financial products and services for consumers and small businesses. Its financial products and services include checking and savings accounts, and credit and debit cards, as well as home, auto, personal, and small business lending services. The Commercial Banking segment provides financial solutions to private, family owned, and certain public companies. Its products and services include banking and credit products across various industry sectors and municipalities, secured lending and lease products, and treasury management services. The Corporate and Investment Banking segment offers a suite of capital markets, banking, and financial products and services, such as corporate banking, investment banking, treasury management, commercial real estate lending and servicing, equity, and fixed income solutions, as well as sales, trading, and research capabilities services to corporate, commercial real estate, government, and institutional clients. The Wealth and Investment Management segment provides personalized wealth management, brokerage, financial planning, lending, private banking, and trust and fiduciary products and services to affluent, high-net worth, and ultra-high-net worth clients. It also operates through financial advisors in brokerage and wealth offices, consumer bank branches, independent offices, and digitally through WellsTrade and Intuitive Investor. The company was founded in 1852 and is headquartered in San Francisco, California.