Head-To-Head Review: Eastern Bankshares (NASDAQ:EBC) and Freddie Mac (OTCMKTS:FMCC)

Freddie Mac (OTCMKTS:FMCC) and Eastern Bankshares (NASDAQ:EBC) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Profitability

This table compares Freddie Mac and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.58%	-90.29%	0.37%
Eastern Bankshares	25.12%	8.71%	1.24%

Volatility and Risk

Freddie Mac has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Earnings and Valuation

This table compares Freddie Mac and Eastern Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freddie Mac	$129.82 billion	0.02	$10.73 billion	$0.01	452.80
Eastern Bankshares	$1.33 billion	3.71	$88.22 million	$1.76	12.26

Freddie Mac has higher revenue and earnings than Eastern Bankshares. Eastern Bankshares is trading at a lower price-to-earnings ratio than Freddie Mac, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

71.7% of Eastern Bankshares shares are held by institutional investors. 0.1% of Freddie Mac shares are held by insiders. Comparatively, 1.3% of Eastern Bankshares shares are held by 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Freddie Mac and Eastern Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	2	1	1	2.40
Eastern Bankshares	0	3	6	0	2.67

Freddie Mac presently has a consensus target price of $12.38, indicating a potential upside of 173.30%. Eastern Bankshares has a consensus target price of $24.86, indicating a potential upside of 15.24%. Given Freddie Mac’s higher probable upside, equities research analysts plainly believe Freddie Mac is more favorable than Eastern Bankshares.

Summary

Eastern Bankshares beats Freddie Mac on 9 of the 15 factors compared between the two stocks.

About Freddie Mac

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.