Analyzing Westpac Banking (NYSE:WBK) & State Bank Financial (STBZ)

State Bank Financial (NASDAQ: STBZ) and Westpac Banking (NYSE:WBK) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Dividends

State Bank Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. Westpac Banking pays an annual dividend of $1.43 per share and has a dividend yield of 6.0%. State Bank Financial pays out 46.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for State Bank Financial and Westpac Banking, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State Bank Financial 0 3 3 0 2.50
Westpac Banking 0 2 4 0 2.67

State Bank Financial presently has a consensus price target of $34.00, suggesting a potential upside of 15.88%. Given State Bank Financial’s higher probable upside, equities research analysts clearly believe State Bank Financial is more favorable than Westpac Banking.

Risk & Volatility

State Bank Financial has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Institutional and Insider Ownership

80.2% of State Bank Financial shares are held by institutional investors. Comparatively, 0.6% of Westpac Banking shares are held by institutional investors. 4.7% of State Bank Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares State Bank Financial and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State Bank Financial 18.77% 9.29% 1.30%
Westpac Banking N/A N/A N/A

Earnings and Valuation

This table compares State Bank Financial and Westpac Banking’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
State Bank Financial $248.13 million 4.61 $46.57 million $1.20 24.45
Westpac Banking $28.58 billion 2.80 $6.09 billion N/A N/A

Westpac Banking has higher revenue and earnings than State Bank Financial.

About State Bank Financial

State Bank Financial Corporation is a bank holding company for State Bank and Trust Company (the Bank). The Bank is a Georgia-based state-chartered bank. The Company offers community banking services to individuals and businesses. Its product line includes loans to small and medium-sized businesses, residential and commercial construction and development loans, commercial real estate loans, farmland and agricultural production loans, residential mortgage loans, home equity loans, and consumer loans. It also offers various commercial and consumer demand, savings and time deposit products, and online banking and bill payment services, online cash management, safe deposit box, rentals, debit card and automatic teller machine (ATM) card services. As of December 31, 2016, it operated 31 full-service branches throughout Georgia. Its deposit products and services include checking accounts, commercial operating accounts, and short-term to longer-term certificates of deposit (CDs).

About Westpac Banking

Westpac Banking Corporation is a banking organization. The Company provides a range of banking and financial services in markets, including consumer, business and institutional banking and wealth management services. The Company is engaged in the provision of financial services, including lending, deposit taking, payments services, investment portfolio management and advice, superannuation and funds management, insurance services, leasing finance, general finance, interest rate risk management and foreign exchange services. The Company’s segments include Consumer Bank, Business Bank, BT Financial Group (BTFG), Westpac Institutional Bank (WIB) and Westpac New Zealand. The Company has branches throughout Australia, New Zealand, Asia and in the Pacific region. The Company through its division offers its services under various brands, such as Westpac, St.George, BankSA, Bank of Melbourne and RAMS brands.

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