City (NASDAQ:CHCO – Get Free Report) and Beacon Financial (NYSE:BBT – Get Free Report) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Volatility and Risk
City has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, Beacon Financial has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Dividends
City pays an annual dividend of $3.48 per share and has a dividend yield of 2.4%. Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.0%. City pays out 38.1% of its earnings in the form of a dividend. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City has raised its dividend for 6 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| City | 0 | 3 | 1 | 0 | 2.25 |
| Beacon Financial | 0 | 4 | 3 | 0 | 2.43 |
City currently has a consensus price target of $136.50, suggesting a potential downside of 6.23%. Beacon Financial has a consensus price target of $32.50, suggesting a potential upside of 1.88%. Given Beacon Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Beacon Financial is more favorable than City.
Profitability
This table compares City and Beacon Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| City | 32.58% | 16.34% | 1.95% |
| Beacon Financial | 8.96% | 9.15% | 1.01% |
Institutional and Insider Ownership
72.4% of City shares are held by institutional investors. Comparatively, 83.1% of Beacon Financial shares are held by institutional investors. 1.8% of City shares are held by insiders. Comparatively, 1.1% of Beacon Financial 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.
Earnings & Valuation
This table compares City and Beacon Financial”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| City | $398.98 million | 5.13 | $130.49 million | $9.14 | 15.93 |
| Beacon Financial | $882.68 million | 3.03 | $90.27 million | $1.32 | 24.17 |
City has higher earnings, but lower revenue than Beacon Financial. City is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.
Summary
City beats Beacon Financial on 9 of the 17 factors compared between the two stocks.
About City
City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.
About Beacon Financial
Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.
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