Sterling Financial (NASDAQ: STSA) and Sterling Bancorp (NYSE:STL) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings & Valuation

This table compares Sterling Financial and Sterling Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sterling Financial N/A N/A N/A N/A N/A
Sterling Bancorp $474.00 million 6.43 $162.79 million $1.20 18.71

Sterling Bancorp has higher revenue and earnings than Sterling Financial.

Institutional and Insider Ownership

91.3% of Sterling Bancorp shares are held by institutional investors. 3.7% of Sterling Bancorp shares are held 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.

Profitability

This table compares Sterling Financial and Sterling Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sterling Financial N/A N/A N/A
Sterling Bancorp 28.40% 8.62% 1.11%

Dividends

Sterling Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Sterling Financial does not pay a dividend. Sterling Bancorp pays out 23.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for Sterling Financial and Sterling Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sterling Financial 0 0 0 0 N/A
Sterling Bancorp 0 1 8 0 2.89

Sterling Bancorp has a consensus target price of $27.42, indicating a potential upside of 22.12%. Given Sterling Bancorp’s higher probable upside, analysts plainly believe Sterling Bancorp is more favorable than Sterling Financial.

Summary

Sterling Bancorp beats Sterling Financial on 9 of the 10 factors compared between the two stocks.

About Sterling Financial

Sterling Financial Corporation (Sterling) is a bank holding company for Sterling Savings Bank. Sterling Savings Bank is a state-chartered commercial bank. Sterling Savings Bank offers retail and commercial banking products and services, mortgage lending and investment products to individuals, small businesses, commercial organizations and corporations. The Company operates in two segments: Community Banking and Home Loan Division. Its Community Banking segment provides traditional banking services through the retail banking, private banking and commercial banking groups, including the originating and servicing of commercial real estate, owner occupied CRE and C&I loans. The Company’s Home Loan Division originates and sells residential real estate loans through its mortgage banking operations, on both a servicing-retained and servicing-released basis. In Apil 2014, Umpqua Holdings Corp merged with Sterling Financial Corp.

About Sterling Bancorp

Sterling Bancorp is a financial holding company. The Company is a bank holding company that owns the Sterling National Bank (the Bank). The Bank specializes in the delivery of services and solutions to business owners, their families and consumers within the communities it serves. The Bank offers a line of commercial, business, and consumer banking products and services. The Bank is engaged in the origination of commercial loans and commercial mortgage loans. The Company also originates residential mortgage loans and consumer loans. The Bank offers services in the New York Metro Market, which includes Manhattan and Long Island, and the New York Suburban Market, which consists of Rockland, Orange, Sullivan, Ulster, Putnam and Westchester counties in New York and Bergen County in New Jersey. Its deposit products include non-interest bearing demand deposits, interest bearing demand deposits, savings, money market and certificate of deposits.

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