Fifth Third Bancorp (NASDAQ:FITB) and Boston Private Financial (NASDAQ:BPFH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.
Volatility & Risk
Fifth Third Bancorp has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500. Comparatively, Boston Private Financial has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Fifth Third Bancorp and Boston Private Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Fifth Third Bancorp | 0 | 5 | 12 | 1 | 2.78 |
Boston Private Financial | 0 | 3 | 0 | 0 | 2.00 |
Fifth Third Bancorp presently has a consensus target price of $34.4605, indicating a potential downside of 5.43%. Boston Private Financial has a consensus target price of $8.00, indicating a potential downside of 40.96%. Given Fifth Third Bancorp's stronger consensus rating and higher probable upside, research analysts clearly believe Fifth Third Bancorp is more favorable than Boston Private Financial.
Insider and Institutional Ownership
79.2% of Fifth Third Bancorp shares are held by institutional investors. Comparatively, 86.0% of Boston Private Financial shares are held by institutional investors. 0.5% of Fifth Third Bancorp shares are held by company insiders. Comparatively, 0.8% of Boston Private Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Dividends
Fifth Third Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.0%. Boston Private Financial pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. Fifth Third Bancorp pays out 39.0% of its earnings in the form of a dividend. Boston Private Financial pays out 25.0% 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. Fifth Third Bancorp has raised its dividend for 4 consecutive years and Boston Private Financial has raised its dividend for 1 consecutive years. Fifth Third Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Fifth Third Bancorp and Boston Private Financial's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Fifth Third Bancorp | $9.79 billion | 2.65 | $2.51 billion | $2.77 | 13.16 |
Boston Private Financial | $409.99 million | 2.72 | $80.03 million | $0.96 | 14.11 |
Fifth Third Bancorp has higher revenue and earnings than Boston Private Financial. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than Boston Private Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Fifth Third Bancorp and Boston Private Financial's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Fifth Third Bancorp | 17.50% | 7.52% | 0.80% |
Boston Private Financial | 11.43% | 4.89% | 0.45% |
Summary
Fifth Third Bancorp beats Boston Private Financial on 13 of the 18 factors compared between the two stocks.