Credit Suisse Group (CS) and Webster Financial Corporation (WBS) Critical Analysis
Credit Suisse Group (NYSE: CS) and Webster Financial Corporation (NYSE:WBS) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Credit Suisse Group pays an annual dividend of $0.72 per share and has a dividend yield of 4.7%. Webster Financial Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 2.2%. Credit Suisse Group pays out -102.9% of its earnings in the form of a dividend. Webster Financial Corporation pays out 43.3% 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. Webster Financial Corporation has increased its dividend for 6 consecutive years. Credit Suisse Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Credit Suisse Group and Webster Financial Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Credit Suisse Group||$22.10 billion||1.78||-$1.79 billion||($0.70)||-22.06|
|Webster Financial Corporation||$976.03 million||4.53||$220.98 million||$2.40||19.99|
Webster Financial Corporation has higher revenue, but lower earnings than Credit Suisse Group. Credit Suisse Group is trading at a lower price-to-earnings ratio than Webster Financial Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Credit Suisse Group has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Webster Financial Corporation has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.
This table compares Credit Suisse Group and Webster Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Credit Suisse Group||-4.84%||-2.93%||-0.16%|
|Webster Financial Corporation||20.43%||9.49%||0.89%|
Institutional & Insider Ownership
3.0% of Credit Suisse Group shares are held by institutional investors. Comparatively, 94.1% of Webster Financial Corporation shares are held by institutional investors. 2.2% of Webster Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Credit Suisse Group and Webster Financial Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Credit Suisse Group||1||0||9||0||2.80|
|Webster Financial Corporation||1||5||2||0||2.13|
Credit Suisse Group currently has a consensus price target of $16.00, suggesting a potential upside of 3.63%. Webster Financial Corporation has a consensus price target of $52.29, suggesting a potential upside of 8.97%. Given Webster Financial Corporation’s higher possible upside, analysts plainly believe Webster Financial Corporation is more favorable than Credit Suisse Group.
Webster Financial Corporation beats Credit Suisse Group on 10 of the 16 factors compared between the two stocks.
Credit Suisse Group Company Profile
Credit Suisse Group AG (Credit Suisse) is a financial services company. The Company’s segments include Swiss Universal Bank, International Wealth Management, Asia Pacific, Global Markets, Investment Banking & Capital Markets, Strategic Resolution Unit and Corporate Center. It offers a range of private banking and wealth management solutions to its clients in its Swiss Universal Bank, International Wealth Management and Asia Pacific divisions. It offers a range of investment advice and discretionary asset management services. It offers a range of investment services, including macroeconomic, equity, bond, commodity and foreign-exchange analysis, as well as research on the economy. Its investment advice covers a range of services from portfolio consulting to advising on individual investments. The Company offers its clients portfolio and risk management solutions, including managed investment products.
Webster Financial Corporation Company Profile
Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.
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