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

Profitability

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

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

Analyst Recommendations

This is a summary of current ratings for Walker & Dunlop and BankUnited, as reported by MarketBeat.com.

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

Walker & Dunlop presently has a consensus target price of $44.00, indicating a potential downside of 5.76%. BankUnited has a consensus target price of $40.82, indicating a potential upside of 24.37%. Given BankUnited’s stronger consensus rating and higher possible upside, analysts plainly believe BankUnited is more favorable than Walker & Dunlop.

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.

Valuation and Earnings

This table compares Walker & Dunlop and BankUnited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Walker & Dunlop $649.05 million 2.25 $142.17 million $4.55 10.26
BankUnited $973.23 million 3.60 $238.16 million $2.23 14.72

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.

Institutional & Insider Ownership

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

Risk and Volatility

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

Summary

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

Walker & Dunlop Company Profile

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).

BankUnited Company Profile

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.

Receive News & Stock Ratings for Walker & Dunlop Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Walker & Dunlop Inc. and related stocks with our FREE daily email newsletter.