LegacyTexas Financial Group (NASDAQ: LTXB) and Sumitomo Mitsui Financial Grp (NYSE:SMFG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.
Risk & Volatility
LegacyTexas Financial Group has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Sumitomo Mitsui Financial Grp has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.
LegacyTexas Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 1.4%. Sumitomo Mitsui Financial Grp pays an annual dividend of $0.24 per share and has a dividend yield of 2.7%. LegacyTexas Financial Group pays out 33.9% of its earnings in the form of a dividend. Sumitomo Mitsui Financial Grp pays out 23.1% 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. Sumitomo Mitsui Financial Grp is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of current recommendations and price targets for LegacyTexas Financial Group and Sumitomo Mitsui Financial Grp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|LegacyTexas Financial Group||0||1||5||0||2.83|
|Sumitomo Mitsui Financial Grp||0||0||0||0||N/A|
LegacyTexas Financial Group currently has a consensus target price of $47.58, indicating a potential upside of 3.92%. Given LegacyTexas Financial Group’s higher possible upside, equities analysts clearly believe LegacyTexas Financial Group is more favorable than Sumitomo Mitsui Financial Grp.
This table compares LegacyTexas Financial Group and Sumitomo Mitsui Financial Grp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|LegacyTexas Financial Group||21.80%||10.94%||1.15%|
|Sumitomo Mitsui Financial Grp||14.38%||7.28%||0.43%|
Insider & Institutional Ownership
85.4% of LegacyTexas Financial Group shares are held by institutional investors. Comparatively, 2.5% of Sumitomo Mitsui Financial Grp shares are held by institutional investors. 3.1% of LegacyTexas Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares LegacyTexas Financial Group and Sumitomo Mitsui Financial Grp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|LegacyTexas Financial Group||$410.44 million||5.38||$89.49 million||$1.89||24.23|
|Sumitomo Mitsui Financial Grp||$47.48 billion||1.30||$5.91 billion||$1.04||8.41|
Sumitomo Mitsui Financial Grp has higher revenue and earnings than LegacyTexas Financial Group. Sumitomo Mitsui Financial Grp is trading at a lower price-to-earnings ratio than LegacyTexas Financial Group, indicating that it is currently the more affordable of the two stocks.
LegacyTexas Financial Group beats Sumitomo Mitsui Financial Grp on 10 of the 15 factors compared between the two stocks.
About LegacyTexas Financial Group
LegacyTexas Financial Group, Inc. is a bank holding company. LegacyTexas Bank (the Bank) is the Company’s principal operating subsidiary, which is a commercial bank that is focused on meeting the needs of businesses and consumers in the North Texas area. Its principal business consists of attracting retail deposits from general public and business community and investing those funds, along with borrowed funds, in commercial real estate loans, secured and unsecured commercial and industrial loans, as well as permanent loans secured by first and second mortgages on one- to four-family residences and consumer loans. Its Warehouse Purchase Program allows mortgage banking company customers to close one- to four-family real estate loans in their own name and manage its cash flow needs until the loans are sold to investors. It offers title services, as well as brokerage services for purchase and sale of non-deposit investment and insurance products through a third-party brokerage arrangement.
About Sumitomo Mitsui Financial Grp
Sumitomo Mitsui Financial Group, Inc. is a holding company for Sumitomo Mitsui Banking Corporation (the Bank) and its subsidiaries. The Company operates through four segments: Commercial Banking, Leasing, Securities and Consumer Finance. The Company and its subsidiaries offer a range of financial services, including commercial banking, leasing, securities, consumer finance and other services. The Company offers commercial banking services to a range of customers, including corporations, mid-sized companies, small-sized companies, individuals, governments and governmental entities mainly through the Bank. The Bank has equity interest in Sumitomo Mitsui Finance and Leasing Company, Limited, which provides a range of leasing services, including equipment lease, operating lease, leveraged lease and aircraft operating lease. The Bank’s subsidiary, SMBC Nikko Securities Inc., offers a range of financial products, and investment consultation and administrative services.
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