Contrasting Webster Financial (NYSE:WBS) & Centerstate Bank (NYSE:CSFL)

Webster Financial (NYSE:WBS) and Centerstate Bank (NASDAQ:CSFL) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Institutional and Insider Ownership

90.2% of Webster Financial shares are owned by institutional investors. Comparatively, 61.4% of Centerstate Bank shares are owned by institutional investors. 1.5% of Webster Financial shares are owned by company insiders. Comparatively, 1.8% of Centerstate Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 3.5%. Centerstate Bank pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. Webster Financial pays out 42.8% of its earnings in the form of a dividend. Webster Financial has raised its dividend for 8 consecutive years and Centerstate Bank has raised its dividend for 3 consecutive years. Webster Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Webster Financial and Centerstate Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Webster Financial 1 2 4 0 2.43
Centerstate Bank 0 0 4 0 3.00

Webster Financial presently has a consensus target price of $62.50, indicating a potential upside of 37.85%. Centerstate Bank has a consensus target price of $28.75, indicating a potential upside of 29.62%. Given Webster Financial’s higher possible upside, analysts plainly believe Webster Financial is more favorable than Centerstate Bank.

Valuation & Earnings

This table compares Webster Financial and Centerstate Bank’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Webster Financial $1.34 billion 3.12 $360.42 million $3.74 12.12
Centerstate Bank $565.76 million 5.12 $156.43 million N/A N/A

Webster Financial has higher revenue and earnings than Centerstate Bank.

Profitability

This table compares Webster Financial and Centerstate Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Webster Financial 27.57% 13.77% 1.36%
Centerstate Bank 27.51% 10.11% 1.58%

Risk and Volatility

Webster Financial has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Centerstate Bank has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Summary

Webster Financial beats Centerstate Bank on 9 of the 14 factors compared between the two stocks.

Webster Financial Company Profile

Webster Financial Corporation operates as the holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Community Banking. The Commercial Banking segment provides lending, deposit, and cash management services to middle market companies; and commercial and industrial lending and leasing, commercial real estate lending, equipment financing, and asset-based lending, as well as treasury and payment services. This segment also offers relationship banking services for high net worth clients, not-for-profit organizations, and business clients with deposit and loan products; and asset management, financial planning, and trust services. The HSA Bank segment offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions to employers for the benefit of their employees and individuals. The Community Banking segment offers deposit and fee-based services, residential mortgages, home equity lines/loans, unsecured consumer loans, and credit cards to consumers, as well as investment and securities-related services, including brokerage and investment advice through a strategic partnership with LPL Financial Holdings Inc. This segment also provides credit, deposit, and cash flow management products to businesses and professional service firms. The company also provides telephone and mobile banking services, as well as through its Website. As of February 21, 2019, it operated 157 banking centers and 316 ATMs. Webster Financial Corporation was founded in 1935 and is headquartered in Waterbury, Connecticut.

Centerstate Bank Company Profile

CenterState Bank Corporation operates as the holding company for CenterState Bank, N.A. that provides various consumer and commercial banking services to individuals, businesses, and industries. The company accepts various deposit products, such as savings, demand, negotiable order of withdrawal, and money market deposit accounts, as well as certificates of deposit and time deposits. Its loan products include real estate loans to individuals and businesses for the purchase, improvement of, or investment in real estate; construction of single-family residential and commercial units; and development of single-family residential building lots. The company's loan products also comprise commercial loans to small-to-medium sized businesses for working capital, equipment purchases, and various other business purposes; and consumer loans consisting of loans to individuals for various consumer purposes, as well as business purpose loans. It also offers mutual funds, annuities, and other investment products. In addition, the company sells fixed income securities; and provides hedging, loan brokerage, correspondent bank deposits, safe-keeping, bond accounting, asset/liability consulting, international wires, clearing and corporate checking account, and other correspondent banking related services. As of December 31, 2018, it operated 126 full service banking offices throughout Florida, Georgia, and Alabama; 1 loan production office in Florida; and 1 loan production office in Macon, Georgia. The company was formerly known as CenterState Banks, Inc. and changed its name to CenterState Bank Corporation in September 2017. CenterState Bank Corporation was founded in 1989 and is headquartered in Winter Haven, Florida.

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