TCF Financial (NYSE: TCF) and Cape Bancorp (NASDAQ:CBNJ) are both banks – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Volatility and Risk

TCF Financial has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Cape Bancorp has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Dividends

TCF Financial pays an annual dividend of $0.30 per share and has a dividend yield of 1.7%. Cape Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. TCF Financial pays out 26.5% of its earnings in the form of a dividend. Cape Bancorp pays out 43.5% 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.

Analyst Recommendations

This is a breakdown of recent recommendations for TCF Financial and Cape Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCF Financial 1 8 4 0 2.23
Cape Bancorp 0 0 0 0 N/A

TCF Financial currently has a consensus price target of $18.27, suggesting a potential upside of 1.40%. Given TCF Financial’s higher possible upside, equities analysts clearly believe TCF Financial is more favorable than Cape Bancorp.

Earnings and Valuation

This table compares TCF Financial and Cape Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
TCF Financial $1.40 billion 2.22 $212.12 million $1.13 15.95
Cape Bancorp N/A N/A N/A $0.92 15.86

TCF Financial has higher revenue and earnings than Cape Bancorp. Cape Bancorp is trading at a lower price-to-earnings ratio than TCF Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
TCF Financial 15.27% 9.63% 0.98%
Cape Bancorp 13.12% 4.73% 0.50%

Institutional and Insider Ownership

82.4% of TCF Financial shares are held by institutional investors. 2.5% of TCF Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

TCF Financial beats Cape Bancorp on 11 of the 12 factors compared between the two stocks.

About TCF Financial

TCF Financial Corporation (TCF) is a bank holding company. The Company’s principal subsidiary is TCF National Bank (TCF Bank). The Company operates in three segments: Consumer Banking, Wholesale Banking and Enterprise Services. Consumer Banking comprises all of the Company’s consumer-facing businesses. The Consumer Banking segment includes retail banking, consumer real estate and auto finance. Wholesale Banking comprises commercial real estate and business lending, leasing and equipment finance and inventory finance. TCF’s consumer banking strategy is primarily to generate deposits to use for funding high credit quality secured loans and leases. Enterprise Services comprises corporate treasury, corporate functions and the Holding Company. As of December 31, 2016, the Company’s total securities available for sale were $1.4 billion. As of December 31, 2016, the Company’s total loans were $17.8 billion. As of December 31, 2016, the Company’s total deposits were $17.2 billion.

About Cape Bancorp

Cape Bancorp, Inc. (Cape Bancorp) is the holding company of Cape Bank (the Bank). The Bank focuses on providing deposit and loan products to retail customers and to small and mid-sized businesses from its fourteen full service branch offices, located in Atlantic and Cape May Counties, one drive-up teller/ATM operation in Atlantic County, three market development offices (MDOs) located in Burlington, Cape May and Atlantic Counties in New Jersey, and two MDOs in Pennsylvania servicing the five county Philadelphia market located in Radnor, Delaware County and in Philadelphia. It attracts deposits from the general public and uses those funds to originate a variety of loans, including commercial mortgages, commercial business loans, home equity loans and lines of credit (HELOC) and construction loans. Its retail and business banking deposit products include checking accounts, money market accounts, savings accounts, and certificates of deposit with terms ranging from 30 days to 60 months.

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