Financial Comparison: Eastern Bankshares (NASDAQ:EBC) versus Beacon Financial (NYSE:BBT)

Eastern Bankshares (NASDAQ:EBC) and Beacon Financial (NYSE:BBT) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Institutional and Insider Ownership

71.7% of Eastern Bankshares shares are held by institutional investors. Comparatively, 83.1% of Beacon Financial shares are held by institutional investors. 1.3% of Eastern Bankshares shares are held by company insiders. Comparatively, 1.1% of Beacon Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Eastern Bankshares and Beacon Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	3	6	0	2.67
Beacon Financial	0	4	3	0	2.43

Eastern Bankshares presently has a consensus price target of $24.86, indicating a potential upside of 16.62%. Beacon Financial has a consensus price target of $32.50, indicating a potential upside of 18.14%. Given Beacon Financial’s higher probable upside, analysts plainly believe Beacon Financial is more favorable than Eastern Bankshares.

Profitability

This table compares Eastern Bankshares and Beacon Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	25.12%	8.71%	1.24%
Beacon Financial	8.96%	9.15%	1.01%

Risk & Volatility

Eastern Bankshares has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Beacon Financial has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Earnings and Valuation

This table compares Eastern Bankshares and Beacon Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.33 billion	3.67	$88.22 million	$1.76	12.11
Beacon Financial	$882.68 million	2.61	$90.27 million	$1.32	20.84

Beacon Financial has lower revenue, but higher earnings than Eastern Bankshares. Eastern Bankshares is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.7%. Eastern Bankshares pays out 34.1% 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. Eastern Bankshares has raised its dividend for 5 consecutive years.

Summary

Eastern Bankshares beats Beacon Financial on 11 of the 17 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

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.