Banc of California (NYSE: BANC) and SunTrust Banks (NYSE:STI) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Institutional & Insider Ownership
83.7% of SunTrust Banks shares are held by institutional investors. 18.1% of Banc of California shares are held by insiders. Comparatively, 0.5% of SunTrust Banks shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Banc of California and SunTrust Banks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Banc of California||11.46%||8.37%||0.60%|
Banc of California pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. SunTrust Banks pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. Banc of California pays out 63.4% of its earnings in the form of a dividend. SunTrust Banks pays out 39.6% 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. SunTrust Banks has raised its dividend for 5 consecutive years.
Earnings and Valuation
This table compares Banc of California and SunTrust Banks’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banc of California||$501.02 million||1.99||$57.70 million||$0.82||24.02|
|SunTrust Banks||$9.74 billion||3.29||$2.27 billion||$4.04||17.07|
SunTrust Banks has higher revenue and earnings than Banc of California. SunTrust Banks is trading at a lower price-to-earnings ratio than Banc of California, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Banc of California and SunTrust Banks, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Banc of California||1||3||2||0||2.17|
Banc of California presently has a consensus price target of $21.60, suggesting a potential upside of 9.64%. SunTrust Banks has a consensus price target of $70.05, suggesting a potential upside of 1.58%. Given Banc of California’s higher possible upside, equities research analysts clearly believe Banc of California is more favorable than SunTrust Banks.
Risk and Volatility
Banc of California has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, SunTrust Banks has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.
SunTrust Banks beats Banc of California on 13 of the 17 factors compared between the two stocks.
About Banc of California
Banc of California, Inc. operates as a bank holding company, which engages in the provision of retail deposits from the general public and invests in commercial, consumer, and real estate secured loans. It operates through the following segments: Commercial Banking, Mortgage Banking, and Corporate and Others. The Commercial Banking segment involves in retail banking, commercial banking, private banking, financial institutions banking, residential portfolio lending, commercial real estate, and multifamily lending, construction and rehab lending, commercial specialty finance, and warehouse lending. The Mortgage Banking segment comprises of mortgage banking business, operated under the trade name of Banc Home Loans. The Corporate and Others segment offers sale of real estate owned and loans. The company was founded on March 25, 2002 and is headquartered in Santa Ana, CA.
About SunTrust Banks
SunTrust Banks, Inc. operates as the holding company for SunTrust Bank that provides various financial services for consumers, businesses, corporations, and institutions in the United States. It operates through two segments, Consumer and Wholesale. The Consumer segment provides deposits and payments; home equity and personal credit lines; auto, student, and other lending products; credit cards; discount/online and full-service brokerage products; professional investment advisory products and services; and trust services, as well as family office solutions. This segment also offers residential mortgage products in the secondary market. The Wholesale segment provides capital markets solutions, including advisory, capital raising, and financial risk management, as well as lease financing solutions; cash management services and auto dealer financing solutions; and construction, mini-perm, and permanent real estate financing, as well as tailored financing and equity investment solutions. This segment also offers treasury and payment solutions, such as operating various electronic and paper payment types, which comprise card, wire transfer, automated clearing house, check, and cash; and provides services clients to manage their accounts online. The company offers its products and services through a network of traditional and in-store branches, automated teller machines, Internet, mobile, and telephone banking channels. As of December 31, 2017, it operated 1,268 full-service banking offices located in Florida, Georgia, Virginia, North Carolina, Tennessee, Maryland, South Carolina, and the District of Columbia. SunTrust Banks, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.
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