Contrasting BankUnited (BKU) and Walker & Dunlop (WD)

BankUnited (NYSE: BKU) and Walker & Dunlop (NYSE:WD) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Profitability

This table compares BankUnited and Walker & Dunlop’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BankUnited 19.54% 9.81% 0.87%
Walker & Dunlop 21.91% 22.86% 5.38%

Dividends

BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.6%. Walker & Dunlop does not pay a dividend. BankUnited pays out 37.7% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares BankUnited and Walker & Dunlop’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BankUnited $973.23 million 3.55 $238.16 million $2.23 14.50
Walker & Dunlop $649.05 million 2.26 $142.17 million $4.55 10.33

BankUnited has higher revenue and earnings than Walker & Dunlop. Walker & Dunlop is trading at a lower price-to-earnings ratio than BankUnited, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

BankUnited has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Walker & Dunlop has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Insider and Institutional Ownership

98.6% of BankUnited shares are held by institutional investors. Comparatively, 77.3% of Walker & Dunlop shares are held by institutional investors. 5.1% of BankUnited shares are held by company insiders. Comparatively, 11.7% of Walker & Dunlop shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for BankUnited and Walker & Dunlop, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BankUnited 0 3 7 0 2.70
Walker & Dunlop 0 2 1 0 2.33

BankUnited currently has a consensus price target of $40.82, suggesting a potential upside of 26.25%. Walker & Dunlop has a consensus price target of $44.00, suggesting a potential downside of 6.34%. Given BankUnited’s stronger consensus rating and higher probable upside, equities research analysts clearly believe BankUnited is more favorable than Walker & Dunlop.

Summary

BankUnited beats Walker & Dunlop on 9 of the 16 factors compared between the two stocks.

About BankUnited

BankUnited, Inc. is the bank holding company of BankUnited (the Bank). The bank is a national banking association. As of December 31, 2016, the Bank provided a range of banking services to individual and corporate customers through 94 banking centers located in 15 Florida counties and six banking centers in the New York metropolitan area. The Bank also provides a range of traditional banking products and services to both its commercial and retail customers. The Company offers a range of lending products, including small business loans, commercial real estate loans, equipment loans and leases, term loans, formula-based loans, municipal and non-profit loans and leases, commercial and mortgage warehouse lines of credit, letters of credit and consumer loans. It offers traditional deposit products, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of terms and rates.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).

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