Critical Analysis: Univest Corporation of Pennsylvania (NASDAQ:UVSP) & Webster Financial (NYSE:WBS)

Webster Financial (NYSE:WBS) and Univest Corporation of Pennsylvania (NASDAQ:UVSP) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Risk & Volatility

Webster Financial has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Univest Corporation of Pennsylvania has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Webster Financial and Univest Corporation of Pennsylvania, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Webster Financial	1	11	4	0	2.19
Univest Corporation of Pennsylvania	0	3	1	0	2.25

Webster Financial currently has a consensus price target of $74.50, indicating a potential upside of 6.20%. Univest Corporation of Pennsylvania has a consensus price target of $35.00, indicating a potential downside of 0.85%. Given Webster Financial’s higher probable upside, analysts clearly believe Webster Financial is more favorable than Univest Corporation of Pennsylvania.

Dividends

Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. Univest Corporation of Pennsylvania pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Webster Financial pays out 27.1% of its earnings in the form of a dividend. Univest Corporation of Pennsylvania pays out 28.0% 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. Univest Corporation of Pennsylvania has increased its dividend for 1 consecutive years. Univest Corporation of Pennsylvania is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Webster Financial and Univest Corporation of Pennsylvania”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Webster Financial	$4.42 billion	2.56	$1.00 billion	$5.91	11.87
Univest Corporation of Pennsylvania	$518.35 million	1.91	$90.76 million	$3.14	11.24

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

Insider and Institutional Ownership

85.6% of Webster Financial shares are owned by institutional investors. Comparatively, 75.1% of Univest Corporation of Pennsylvania shares are owned by institutional investors. 0.5% of Webster Financial shares are owned by company insiders. Comparatively, 1.8% of Univest Corporation of Pennsylvania shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Webster Financial and Univest Corporation of Pennsylvania’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Webster Financial	22.67%	11.10%	1.22%
Univest Corporation of Pennsylvania	17.51%	9.82%	1.10%

Summary

Webster Financial beats Univest Corporation of Pennsylvania on 13 of the 17 factors compared between the two stocks.

About Webster Financial

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of financial products and services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Consumer Banking. The Commercial Banking segment offers commercial real estate and equipment financing, business banking, asset-based lending, and commercial services; public sector finance; mortgage warehouse financing; sponsor and specialty financing services; credit, deposit, and cash flow management services; and wealth management solutions to business owners and operators, including trust, asset management, financial planning, insurance, retirement, and investment products, as well as treasury management services comprising derivative, treasury, accounts payable, accounts receivable, and trade products and services. This segment also provides commercial services, such as accounts receivable factoring and trade financing, payroll funding, and business process outsourcing. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefit services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. The Consumer Banking segment provides consumer deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers; and small business banking products, such as credit, deposit, and cash flow management products to businesses and professional service firms. The company offers online and mobile banking services. Webster Financial Corporation was founded in 1935 and is headquartered in Stamford, Connecticut.

About Univest Corporation of Pennsylvania

Univest Financial Corporation operates as the bank holding company for Univest Bank and Trust Co. that provides banking products and services primarily in the United States. It operates through three segments: Banking, Wealth Management, and Insurance. The Banking segment offers a range of banking services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking, and equipment lease financing services for individuals, businesses, municipalities, and nonprofit organizations. Its Wealth Management segment provides investment advisory, financial planning, and trust and brokerage services for private families and individuals, municipal pension plans, retirement plans, and trusts and guardianships. The Insurance segment offers commercial property and casualty insurance, employee benefits solutions, personal insurance lines, and human resources consulting services. The company was formerly known as Univest Corporation of Pennsylvania and changed its name to Univest Financial Corporation in January 2019. The company was founded in 1876 and is headquartered in Souderton, Pennsylvania.