Associated Banc (NYSE:ASB) & Beacon Financial (NYSE:BBT) Critical Contrast

Beacon Financial (NYSE:BBT) and Associated Banc (NYSE:ASB) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Risk and Volatility

Beacon Financial has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Associated Banc has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

83.1% of Beacon Financial shares are held by institutional investors. Comparatively, 83.0% of Associated Banc shares are held by institutional investors. 1.1% of Beacon Financial shares are held by company insiders. Comparatively, 0.7% of Associated Banc shares are held by company 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Beacon Financial and Associated Banc, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beacon Financial	0	4	3	0	2.43
Associated Banc	0	6	5	1	2.58

Beacon Financial currently has a consensus target price of $32.50, suggesting a potential upside of 3.66%. Associated Banc has a consensus target price of $32.00, suggesting a potential upside of 6.44%. Given Associated Banc’s stronger consensus rating and higher possible upside, analysts plainly believe Associated Banc is more favorable than Beacon Financial.

Profitability

This table compares Beacon Financial and Associated Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Beacon Financial	8.96%	9.15%	1.01%
Associated Banc	19.66%	10.64%	1.12%

Dividends

Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.1%. Associated Banc pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Associated Banc pays out 33.6% of its earnings in the form of a dividend. Associated Banc has raised its dividend for 13 consecutive years.

Earnings and Valuation

This table compares Beacon Financial and Associated Banc”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beacon Financial	$800.81 million	3.28	$90.27 million	$1.32	23.75
Associated Banc	$2.46 billion	2.31	$474.78 million	$2.86	10.51

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

Summary

Associated Banc beats Beacon Financial on 13 of the 18 factors compared between the two stocks.

About Beacon Financial

Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.

About Associated Banc

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. The company offers lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending and equipment finance, loan syndications products, residential mortgages, home equity loans and lines of credit, personal and installment loans, auto finance and business loans, and business lines of credit. It also provides deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; specialized financial services, such as interest rate risk management and foreign exchange solutions; fiduciary services, such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services; and investable funds solutions, including savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full-service, discount, and online investment brokerage; investment advisory services; and trust and investment management accounts. In addition, the company offers deposit and transactional solutions, including checking, credit, debit and pre-paid cards, online banking and bill pay; and money transfer services. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.