Critical Analysis: Stonegate Bank (NASDAQ:SGBK) vs. Chemical Financial Corporation (CHFC)
Chemical Financial Corporation (NASDAQ: CHFC) and Stonegate Bank (NASDAQ:SGBK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitabiliy.
This is a summary of recent recommendations for Chemical Financial Corporation and Stonegate Bank, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chemical Financial Corporation||0||0||5||0||3.00|
Chemical Financial Corporation currently has a consensus price target of $56.00, indicating a potential upside of 15.46%. Stonegate Bank has a consensus price target of $49.00, indicating a potential upside of 5.95%. Given Chemical Financial Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Chemical Financial Corporation is more favorable than Stonegate Bank.
Risk and Volatility
Chemical Financial Corporation has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Stonegate Bank has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.
Chemical Financial Corporation pays an annual dividend of $1.08 per share and has a dividend yield of 2.2%. Stonegate Bank pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Chemical Financial Corporation pays out 48.9% of its earnings in the form of a dividend. Stonegate Bank pays out 14.9% 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.
Insider and Institutional Ownership
79.4% of Chemical Financial Corporation shares are held by institutional investors. Comparatively, 63.6% of Stonegate Bank shares are held by institutional investors. 2.2% of Chemical Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Chemical Financial Corporation and Stonegate Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chemical Financial Corporation||21.37%||7.47%||1.06%|
Earnings and Valuation
This table compares Chemical Financial Corporation and Stonegate Bank’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Chemical Financial Corporation||$552.98 million||6.24||$157.18 million||$2.21||21.95|
|Stonegate Bank||$103.92 million||6.81||$32.90 million||$2.15||21.51|
Chemical Financial Corporation has higher revenue and earnings than Stonegate Bank. Stonegate Bank is trading at a lower price-to-earnings ratio than Chemical Financial Corporation, indicating that it is currently the more affordable of the two stocks.
Chemical Financial Corporation beats Stonegate Bank on 13 of the 16 factors compared between the two stocks.
About Chemical Financial Corporation
Chemical Financial Corporation is a financial holding company. The Company operates in the commercial banking segment. The Company, through its subsidiary bank, Chemical Bank, offers banking and fiduciary products and services. These products and services include business and personal checking accounts, savings and individual retirement accounts, time deposit instruments, electronically accessed banking products, residential and commercial real estate financing, commercial lending, consumer financing, access to insurance and investment products, corporate and personal wealth management services, and other banking services. As of December 31, 2016, the Corporation and Chemical Bank served these markets through 249 banking offices. In addition to the banking offices, Chemical Bank operated eight loan production offices and over 272 automated teller machines, both on- and off-bank premises, as of December 31, 2016. Its loan portfolio includes commercial and real estate construction.
About Stonegate Bank
Stonegate Bank (the Bank) is a state chartered commercial bank in the State of Florida. The Bank provides a full range of banking services to individual and corporate customers from its branch locations in Southeast and West Florida. The Bank provides personal banking, business banking and wealth management services. The Bank’s loans portfolio includes commercial real estate, construction and land development, residential real estate, commercial and consumer loans. Its personal banking services include checking account, money market, savings account, certificate of deposits, individual retirement accounts, consumer loans and residential mortgage loans. It also offers card services, such as credit cards and debit cards. Its wealth management services include asset management, trust services, estate planning, insurance planning and retirement planning for business owners.
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