NatWest Group (OTCMKTS:RBSPF) and Regions Financial (NYSE:RF) Critical Analysis

NatWest Group (OTCMKTS:RBSPF) and Regions Financial (NYSE:RF) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Profitability

This table compares NatWest Group and Regions Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NatWest Group	20.10%	14.01%	0.82%
Regions Financial	23.33%	12.88%	1.42%

Analyst Ratings

This is a breakdown of recent ratings and target prices for NatWest Group and Regions Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NatWest Group	0	0	1	0	3.00
Regions Financial	4	10	6	0	2.10

Regions Financial has a consensus price target of $32.24, indicating a potential upside of 5.79%. Given Regions Financial’s higher probable upside, analysts plainly believe Regions Financial is more favorable than NatWest Group.

Insider and Institutional Ownership

79.4% of Regions Financial shares are held by institutional investors. 0.3% of Regions Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

NatWest Group has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares NatWest Group and Regions Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NatWest Group	$38.91 billion	1.92	$7.69 billion	$1.00	9.33
Regions Financial	$7.62 billion	3.41	$2.16 billion	$2.45	12.44

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

Summary

Regions Financial beats NatWest Group on 10 of the 14 factors compared between the two stocks.

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.