Umpqua (UMPQ) versus People's United Financial (PBCT) Financial Analysis
Umpqua (NASDAQ: UMPQ) and People's United Financial (NASDAQ:PBCT) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
This table compares Umpqua and People's United Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|People's United Financial||21.64%||7.16%||0.90%|
This is a summary of current recommendations for Umpqua and People's United Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|People's United Financial||1||5||1||0||2.00|
Umpqua currently has a consensus target price of $22.90, indicating a potential downside of 3.33%. People's United Financial has a consensus target price of $19.93, indicating a potential upside of 9.38%. Given People's United Financial’s higher possible upside, analysts plainly believe People's United Financial is more favorable than Umpqua.
Earnings and Valuation
This table compares Umpqua and People's United Financial’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Umpqua||$1.22 billion||4.29||$246.01 million||$1.07||22.14|
|People's United Financial||$1.66 billion||3.82||$337.20 million||$1.04||17.52|
People's United Financial has higher revenue and earnings than Umpqua. People's United Financial is trading at a lower price-to-earnings ratio than Umpqua, indicating that it is currently the more affordable of the two stocks.
Umpqua pays an annual dividend of $0.80 per share and has a dividend yield of 3.4%. People's United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 3.8%. Umpqua pays out 74.8% of its earnings in the form of a dividend. People's United Financial pays out 66.3% 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. People's United Financial has increased its dividend for 11 consecutive years. People's United Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Umpqua has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, People's United Financial has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
Institutional & Insider Ownership
91.2% of Umpqua shares are owned by institutional investors. Comparatively, 76.2% of People's United Financial shares are owned by institutional investors. 1.0% of Umpqua shares are owned by insiders. Comparatively, 2.5% of People's United Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Umpqua beats People's United Financial on 9 of the 17 factors compared between the two stocks.
Umpqua Holdings Corporation, through its subsidiaries, provides commercial and retail banking, and retail brokerage services. It operates through four segments: Commercial Bank, Wealth Management, Retail Bank, and Home Lending. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit. It also provides loans for business and commercial customers, such as accounts receivable and inventory financing, multi-family and equipment loans, commercial equipment leases, international trade, real estate construction loans, permanent financing products, small business administration program financing, and residential mortgage loans, as well as capital markets and treasury management services. In addition, the company offers loan products for small businesses; commercial and industrial loans; residential real estate loans for the construction, purchase, and refinancing of residential owner-occupied and rental properties; and consumer loans comprising secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans. Further, it provides financial planning, trust, and investment services; broker dealer and investment advisory services; and technology-based services that include remote deposit capture, online banking, bill pay and treasury, mobile banking, voice response banking, automatic payroll deposit program, ATM, interactive product kiosks, and Website services. The company serves small businesses, middle market, and large commercial customers; individual investors; and high net worth individuals. As of December 31, 2017, it operated commercial banking centers in 333 locations in Oregon, Washington, California, Idaho, and Nevada. The company was founded in 1953 and is headquartered in Portland, Oregon.
About People's United Financial
People’s United Financial, Inc. is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.
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