Webster Financial (NYSE:WBS) and National Bank (NYSE:NBHC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Webster Financial pays an annual dividend of $1.32 per share and has a dividend yield of 2.2%. National Bank pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. Webster Financial pays out 51.0% of its earnings in the form of a dividend. National Bank pays out 44.4% 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. Webster Financial has increased its dividend for 7 consecutive years and National Bank has increased its dividend for 2 consecutive years. Webster Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
92.3% of Webster Financial shares are held by institutional investors. Comparatively, 93.6% of National Bank shares are held by institutional investors. 2.0% of Webster Financial shares are held by insiders. Comparatively, 6.4% of National Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Webster Financial and National Bank’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Webster Financial||$1.17 billion||4.67||$255.43 million||$2.59||22.93|
|National Bank||$203.63 million||5.61||$14.57 million||$1.26||29.51|
Webster Financial has higher revenue and earnings than National Bank. Webster Financial is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for Webster Financial and National Bank, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Webster Financial currently has a consensus target price of $62.00, suggesting a potential upside of 4.38%. National Bank has a consensus target price of $38.20, suggesting a potential upside of 2.74%. Given Webster Financial’s higher probable upside, equities analysts clearly believe Webster Financial is more favorable than National Bank.
This table compares Webster Financial and National Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Webster Financial has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, National Bank has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.
Webster Financial beats National Bank on 11 of the 17 factors compared between the two stocks.
Webster Financial Company Profile
Webster Financial Corporation operates as the holding company for Webster Bank, National Association that provides financial services to individuals, families, and businesses in the United States. It operates through four segments: Commercial Banking, Community Banking, HSA Bank, and Private Banking. The Commercial Banking segment provides lending, deposit, and cash management services to middle market companies; and asset-based lending, commercial real estate, and equipment finance, as well as treasury and payment services, which include government and institutional banking. The Community Banking segment offers deposit and fee-based services, residential mortgages, home equity lines/loans, unsecured consumer loans, and credit cards to consumers, as well as investment and securities-related services, including brokerage and investment advice through a strategic partnership with LPL Financial Holdings Inc. This segment also provides credit, deposit, and cash flow management products to businesses and professional service firms. The HSA Bank segment offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions to employers for the benefit of their employees and individuals. The Private Banking segment provides relationship banking services for high net worth clients, not-for-profit organizations, and business clients for asset management, trust, loan, and deposit products and financial planning services. The company also provides its services telephone and mobile banking services, as well as through its Website. As of February 14, 2018, it operated 167 banking centers and 334 ATMs. Webster Financial Corporation was founded in 1935 and is headquartered in Waterbury, Connecticut.
National Bank Company Profile
National Bank Holdings Corporation operates as the bank holding company for NBH Bank, N.A. that provides various banking products and financial services to commercial, business, and consumer clients in the United States. The company offers deposit products, including checking accounts, savings accounts, money market accounts, and other deposit accounts, including fixed-rate and fixed maturity time deposits. It also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases. The company also offers non-owner occupied commercial real estate loans consisting of loans on multi-family construction properties; commercial properties, such as office buildings, retail centers, or free-standing commercial properties; and multi-family and investor properties, as well as raw land development loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. As of December 31, 2017, the company operated through a network of 85 banking centers located in Colorado, the greater Kansas City area, New Mexico, and Texas. It also operates 106 ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. National Bank Holdings Corporation was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.
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