Walker & Dunlop (NYSE: WD) and People’s United Financial (NASDAQ:PBCT) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.
This is a breakdown of recent recommendations and price targets for Walker & Dunlop and People’s United Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Walker & Dunlop||0||2||1||0||2.33|
|People’s United Financial||2||8||0||0||1.80|
Walker & Dunlop currently has a consensus price target of $44.00, suggesting a potential downside of 19.99%. People’s United Financial has a consensus price target of $18.84, suggesting a potential downside of 0.40%. Given People’s United Financial’s higher possible upside, analysts plainly believe People’s United Financial is more favorable than Walker & Dunlop.
This table compares Walker & Dunlop and People’s United Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Walker & Dunlop||21.91%||22.86%||5.38%|
|People’s United Financial||24.28%||6.39%||0.84%|
Institutional & Insider Ownership
77.1% of Walker & Dunlop shares are held by institutional investors. Comparatively, 77.0% of People’s United Financial shares are held by institutional investors. 11.7% of Walker & Dunlop shares are held by company insiders. Comparatively, 2.7% of People’s United Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Walker & Dunlop and People’s United Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Walker & Dunlop||$649.05 million||2.65||$142.17 million||$4.55||12.09|
|People’s United Financial||$1.34 billion||4.77||$307.13 million||$0.91||20.79|
People’s United Financial has higher revenue and earnings than Walker & Dunlop. Walker & Dunlop is trading at a lower price-to-earnings ratio than People’s United Financial, indicating that it is currently the more affordable of the two stocks.
People’s United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 3.6%. Walker & Dunlop does not pay a dividend. People’s United Financial pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. People’s United Financial has increased its dividend for 10 consecutive years.
Risk and Volatility
Walker & Dunlop has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.
Walker & Dunlop beats People’s United Financial on 9 of the 17 factors compared between the two stocks.
Walker & Dunlop Company Profile
Walker & Dunlop, Inc. is a holding company, which conducts its operations through Walker & Dunlop, LLC. The Company provides commercial real estate financial products and services primarily to developers and owners of multifamily properties. The Company originates, sells and services a range of multifamily and other commercial real estate financing products, including Multifamily Finance, Federal Housing Administration (FHA) Finance, Capital Markets, and Proprietary Capital. It originates and sells loans through the programs of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the government-sponsored enterprises (GSEs)), the Government National Mortgage Association (Ginnie Mae) and the Federal Housing Administration, a division of the United States Department of Housing and Urban Development (together with Ginnie Mae, HUD).
People’s United Financial Company Profile
People’s United Financial, Inc. is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.
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