Head to Head Contrast: Mizuho Financial Group (MFG) versus SunTrust Banks (STI)

Mizuho Financial Group (NYSE: MFG) and SunTrust Banks (NYSE:STI) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Mizuho Financial Group and SunTrust Banks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mizuho Financial Group 0 2 0 0 2.00
SunTrust Banks 0 14 12 0 2.46

SunTrust Banks has a consensus price target of $70.05, suggesting a potential upside of 6.10%. Given SunTrust Banks’ stronger consensus rating and higher possible upside, analysts plainly believe SunTrust Banks is more favorable than Mizuho Financial Group.

Dividends

Mizuho Financial Group pays an annual dividend of $0.10 per share and has a dividend yield of 2.9%. SunTrust Banks pays an annual dividend of $1.60 per share and has a dividend yield of 2.4%. Mizuho Financial Group pays out 25.0% of its earnings in the form of a dividend. SunTrust Banks pays out 39.6% 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. SunTrust Banks has raised its dividend for 5 consecutive years. Mizuho Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

0.4% of Mizuho Financial Group shares are held by institutional investors. Comparatively, 83.6% of SunTrust Banks shares are held by institutional investors. 0.5% of SunTrust Banks shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Mizuho Financial Group has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, SunTrust Banks has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Earnings and Valuation

This table compares Mizuho Financial Group and SunTrust Banks’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mizuho Financial Group $32.16 billion 1.34 $5.19 billion $0.40 8.48
SunTrust Banks $9.74 billion 3.15 $2.27 billion $4.04 16.34

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

Profitability

This table compares Mizuho Financial Group and SunTrust Banks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mizuho Financial Group 16.15% 5.81% 0.27%
SunTrust Banks 24.92% 10.05% 1.09%

Summary

SunTrust Banks beats Mizuho Financial Group on 13 of the 17 factors compared between the two stocks.

About Mizuho Financial Group

Mizuho Financial Group, Inc. engages in banking, trust banking, securities, and other businesses related to financial services in Japan, the Americas, Europe, and Asia/Oceania. It operates through five segments: Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, and Asset Management Company. The company provides deposits; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers financial solutions, such as bonds, mergers and acquisitions advisory, etc. for corporate customers to meet their needs in fund-raising, investment, management, and financial strategies; solutions based on their capital management, business strategy, and financial strategy; solutions related to real estate; advisory services and solutions, such as advice on financial strategy and proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers sales and trading services to meet risk hedging and investment needs; investment products for individual customers; and consulting services for institutional investors. Additionally, the company provides products and services related to trust, securitization and structured finance, pension, and stock transfers; securities services; and research, private banking, information technology-related, telephone, and Internet banking services. As of December 31, 2017, its branch network included 466 Mizuho Bank, 57 Mizuho Trust and Banking, and 273 Mizuho Securities; and 6,900 ATMs in Japan. The company was founded in 2003 and is headquartered in Tokyo, Japan.

About SunTrust Banks

SunTrust Banks, Inc. operates as the holding company for SunTrust Bank that provides various financial services for consumers, businesses, corporations, and institutions in the United States. It operates through two segments, Consumer and Wholesale. The Consumer segment provides deposits and payments; home equity and personal credit lines; auto, student, and other lending products; credit cards; discount/online and full-service brokerage products; professional investment advisory products and services; and trust services, as well as family office solutions. This segment also offers residential mortgage products in the secondary market. The Wholesale segment provides capital markets solutions, including advisory, capital raising, and financial risk management, as well as lease financing solutions; cash management services and auto dealer financing solutions; and construction, mini-perm, and permanent real estate financing, as well as tailored financing and equity investment solutions. This segment also offers treasury and payment solutions, such as operating various electronic and paper payment types, which comprise card, wire transfer, automated clearing house, check, and cash; and provides services clients to manage their accounts online. The company offers its products and services through a network of traditional and in-store branches, automated teller machines, Internet, mobile, and telephone banking channels. As of December 31, 2017, it operated 1,268 full-service banking offices located in Florida, Georgia, Virginia, North Carolina, Tennessee, Maryland, South Carolina, and the District of Columbia. SunTrust Banks, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.

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