Great Western Bancorp (NYSE: GWB) and Fulton Financial (NASDAQ:FULT) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.
Great Western Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.8%. Fulton Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.3%. Great Western Bancorp pays out 34.5% of its earnings in the form of a dividend. Fulton Financial pays out 44.9% 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. Great Western Bancorp has increased its dividend for 2 consecutive years.
This table compares Great Western Bancorp and Fulton Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Great Western Bancorp||27.04%||8.66%||1.30%|
This is a breakdown of current recommendations and price targets for Great Western Bancorp and Fulton Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Great Western Bancorp||0||4||5||0||2.56|
Great Western Bancorp currently has a consensus price target of $46.56, indicating a potential upside of 6.27%. Fulton Financial has a consensus price target of $18.50, indicating a potential downside of 3.39%. Given Great Western Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Great Western Bancorp is more favorable than Fulton Financial.
Insider and Institutional Ownership
63.4% of Fulton Financial shares are owned by institutional investors. 0.3% of Great Western Bancorp shares are owned by company insiders. Comparatively, 0.7% of Fulton Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Great Western Bancorp and Fulton Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Great Western Bancorp||$497.73 million||5.18||$144.78 million||$2.32||18.88|
|Fulton Financial||$876.84 million||3.83||$171.75 million||$0.98||19.54|
Fulton Financial has higher revenue and earnings than Great Western Bancorp. Great Western Bancorp is trading at a lower price-to-earnings ratio than Fulton Financial, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Great Western Bancorp has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, Fulton Financial has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.
Great Western Bancorp beats Fulton Financial on 11 of the 17 factors compared between the two stocks.
Great Western Bancorp Company Profile
Great Western Bancorp, Inc. is a full-service regional bank holding company. The Company is the holding company of the Great Western Bank (the Bank). As of September 30, 2016, the Company served customers through 173 branches in various markets in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. The Company focuses on business and agribusiness banking, complemented by retail banking and wealth management services. The Company’s loan portfolio consists primarily of business loans, consisting of commercial and industrial loans (C&I), commercial real estate loans and agribusiness loans. The Company offers its business banking customers a focused range of financial products designed to meet the specific needs of their businesses, including loans, lines of credit, cash management services, online business deposit and wire transfer services, in addition to non-interest-bearing demand deposit and savings accounts, and corporate credit cards.
Fulton Financial Company Profile
Fulton Financial Corporation operates as a multi-bank financial holding company that provides banking and financial services to businesses and consumers. It accepts various checking accounts and savings deposit products, certificates of deposit, and individual retirement accounts. The company also offers consumer loans, including home equity loans and lines of credit, automobile loans, automobile and equipment leases, personal lines of credit, and checking account overdraft protection; construction and jumbo residential mortgage loans; and commercial lending products comprising commercial, financial, agricultural, and real estate loans. In addition, it provides equipment leasing, letters of credit, cash management services, and traditional deposit products; and investment management, trust, brokerage, insurance, and investment advisory services. Further, the company owns investment securities and other investments, as well as trust preferred securities; and sells various life insurance products. It provides its products and services through branch banking, as well as through a network of automated teller machines, telephone banking, mobile banking, and online banking. As of January 18, 2018, the company operated 240 branches in Pennsylvania, Maryland, Delaware, New Jersey, and Virginia. Fulton Financial Corporation was founded in 1882 and is headquartered in Lancaster, Pennsylvania.
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