BankFinancial (NASDAQ: PBCT) and People’s United Financial (NASDAQ:PBCT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.
Risk and Volatility
BankFinancial has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.
This is a summary of current ratings and price targets for BankFinancial and People’s United Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|People’s United Financial||1||3||2||0||2.17|
BankFinancial currently has a consensus price target of $16.75, indicating a potential upside of 4.17%. People’s United Financial has a consensus price target of $20.25, indicating a potential upside of 12.88%. Given People’s United Financial’s higher possible upside, analysts clearly believe People’s United Financial is more favorable than BankFinancial.
Earnings & Valuation
This table compares BankFinancial and People’s United Financial’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BankFinancial||$62.59 million||4.48||$9.00 million||$0.63||25.52|
|People’s United Financial||$1.66 billion||3.78||$337.20 million||$1.04||17.25|
People’s United Financial has higher revenue and earnings than BankFinancial. People’s United Financial is trading at a lower price-to-earnings ratio than BankFinancial, indicating that it is currently the more affordable of the two stocks.
BankFinancial pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. People’s United Financial pays an annual dividend of $0.70 per share and has a dividend yield of 3.9%. BankFinancial pays out 63.5% of its earnings in the form of a dividend. People’s United Financial pays out 67.3% 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. BankFinancial has increased its dividend for 4 consecutive years and People’s United Financial has increased its dividend for 11 consecutive years. People’s United Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
65.1% of BankFinancial shares are owned by institutional investors. Comparatively, 78.1% of People’s United Financial shares are owned by institutional investors. 15.2% of BankFinancial shares are owned by company insiders. Comparatively, 2.5% of People’s United Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares BankFinancial and People’s United Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|People’s United Financial||23.24%||7.57%||0.95%|
People’s United Financial beats BankFinancial on 10 of the 16 factors compared between the two stocks.
BankFinancial Corporation operates as the holding company for BankFinancial, National Association that provides commercial, family, and personal banking products and services in Illinois. The company accepts various deposit products, such as savings, NOW, checking, money market, IRA, and other retirement accounts, as well as certificates of deposit. It also offers multi-family and nonresidential real estate, construction and land, and commercial loans, as well as commercial leases; consumer loans; and one-to-four family residential mortgage loans, including home equity loans and lines of credit. In addition, the company provides various financial products and services, such as cash management, fund transfer, bill payment and other online and mobile banking transactions, automated teller machines, safe deposit boxes, trust, wealth management, and general insurance agency. Further, it offers financial planning services; and sells property and casualty, and other insurance products on an agency basis. It operates 19 full-service banking offices located in Cook, DuPage, Lake, and Will Counties. BankFinancial Corporation was founded in 1924 and is headquartered in Burr Ridge, Illinois.
About People’s United Financial
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.
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