People’s United Financial (NASDAQ: PBCT) and BankUnited (NYSE:BKU) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitabiliy, dividends, valuation and institutional ownership.
Profitability
This table compares People’s United Financial and BankUnited’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| People’s United Financial | 18.88% | 6.14% | 0.75% |
| BankUnited | 19.54% | 9.95% | 0.88% |
Volatility and Risk
People’s United Financial has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, BankUnited has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.
Institutional and Insider Ownership
75.9% of People’s United Financial shares are owned by institutional investors. 2.7% of People’s United Financial shares are owned by company insiders. Comparatively, 5.1% of BankUnited shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
People’s United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 3.9%. BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. People’s United Financial pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BankUnited pays out 37.7% of its earnings in the form of a dividend. BankUnited has increased its dividend for 10 consecutive years.
Analyst Ratings
This is a breakdown of recent ratings and price targets for People’s United Financial and BankUnited, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| People’s United Financial | 2 | 8 | 0 | 0 | 1.80 |
| BankUnited | 0 | 3 | 7 | 0 | 2.70 |
People’s United Financial presently has a consensus price target of $18.03, suggesting a potential upside of 2.51%. BankUnited has a consensus price target of $40.82, suggesting a potential upside of 16.16%. Given BankUnited’s stronger consensus rating and higher possible upside, analysts clearly believe BankUnited is more favorable than People’s United Financial.
Earnings and Valuation
This table compares People’s United Financial and BankUnited’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| People’s United Financial | $1.34 billion | 4.43 | $300.38 million | $0.89 | 19.76 |
| BankUnited | $973.23 million | 3.86 | $238.16 million | $2.23 | 15.76 |
People’s United Financial has higher revenue and earnings than BankUnited. BankUnited 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.
Summary
BankUnited beats People’s United Financial on 11 of the 17 factors compared between the two stocks.
About People’s United Financial
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.
About BankUnited
BankUnited, Inc. is the bank holding company of BankUnited (the Bank). The bank is a national banking association. As of December 31, 2016, the Bank provided a range of banking services to individual and corporate customers through 94 banking centers located in 15 Florida counties and six banking centers in the New York metropolitan area. The Bank also provides a range of traditional banking products and services to both its commercial and retail customers. The Company offers a range of lending products, including small business loans, commercial real estate loans, equipment loans and leases, term loans, formula-based loans, municipal and non-profit loans and leases, commercial and mortgage warehouse lines of credit, letters of credit and consumer loans. It offers traditional deposit products, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of terms and rates.
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