Huntington Bancshares (NASDAQ:HBAN) & SunTrust Banks (STI) Financial Analysis

SunTrust Banks (NYSE: STI) and Huntington Bancshares (NASDAQ:HBAN) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Volatility & Risk

SunTrust Banks has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Huntington Bancshares has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Earnings and Valuation

This table compares SunTrust Banks and Huntington Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SunTrust Banks $9.16 billion 3.34 $1.88 billion $3.90 16.50
Huntington Bancshares $3.78 billion 4.20 $711.82 million $0.83 17.71

SunTrust Banks has higher revenue and earnings than Huntington Bancshares. SunTrust Banks is trading at a lower price-to-earnings ratio than Huntington Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

80.8% of SunTrust Banks shares are held by institutional investors. Comparatively, 73.8% of Huntington Bancshares shares are held by institutional investors. 0.6% of SunTrust Banks shares are held by insiders. Comparatively, 1.3% of Huntington Bancshares shares are held by 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.

Dividends

SunTrust Banks pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. Huntington Bancshares pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. SunTrust Banks pays out 41.0% of its earnings in the form of a dividend. Huntington Bancshares pays out 38.6% 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. Huntington Bancshares has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for SunTrust Banks and Huntington Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SunTrust Banks 0 14 8 0 2.36
Huntington Bancshares 0 6 12 0 2.67

SunTrust Banks currently has a consensus price target of $63.84, suggesting a potential downside of 0.80%. Huntington Bancshares has a consensus price target of $15.24, suggesting a potential upside of 3.64%. Given Huntington Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Huntington Bancshares is more favorable than SunTrust Banks.

Profitability

This table compares SunTrust Banks and Huntington Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SunTrust Banks 20.88% 8.83% 0.96%
Huntington Bancshares 20.76% 11.96% 1.12%

Summary

Huntington Bancshares beats SunTrust Banks on 10 of the 17 factors compared between the two stocks.

About SunTrust Banks

SunTrust Banks, Inc. is a provider of financial services. The Company’s principal subsidiary is SunTrust Bank (the Bank). The Company’s business segments include Consumer Banking and Private Wealth Management, Wholesale Banking, Mortgage Banking and Corporate Other. As of December 31, 2016, the Consumer Banking and Private Wealth Management segment consisted of three primary businesses: Consumer Banking, Consumer Lending and Private Wealth Management. The Wholesale Banking segment includes the operations of the Corporate and investment banking (CIB), Commercial and Business Banking, Commercial Real Estate, and Treasury and Payment Solutions businesses. The Mortgage Banking segment offers residential mortgage products nationally through its retail and correspondent channels, the Internet (www.suntrust.com) and by telephone. The Bank provides clients with a selection of full-, self- and assisted-service channels, including branch, call center, Teller Connect machines, mobile and tablet.

About Huntington Bancshares

Huntington Bancshares Incorporated (Huntington) is a bank holding company. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), the Company provides commercial and consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. Its segments include Consumer and Business Banking, Commercial Banking, Commercial Real Estate and Vehicle Finance, Regional Banking and The Huntington Private Client Group, Home Lending and Treasury/Other. The Bank offers commercial and consumer loans. Its consumer loans include automobile, home equity, residential mortgage, and recreational vehicle (RV) and marine finance loans. It offers demand deposits-noninterest-bearing, demand deposits-interest-bearing, money market deposits, and savings and other domestic deposits.

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