Critical Analysis: Barclays (NYSE:BCS) vs. Associated Banc (NYSE:ASB)

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

Risk & Volatility

Associated Banc has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Barclays has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares Associated Banc and Barclays’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Associated Banc	19.66%	10.64%	1.12%
Barclays	22.27%	8.80%	0.42%

Insider & Institutional Ownership

83.0% of Associated Banc shares are owned by institutional investors. Comparatively, 3.4% of Barclays shares are owned by institutional investors. 0.7% of Associated Banc shares are owned by company insiders. Comparatively, 0.0% of Barclays shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Associated Banc pays an annual dividend of $0.96 per share and has a dividend yield of 3.4%. Barclays pays an annual dividend of $0.61 per share and has a dividend yield of 2.5%. Associated Banc pays out 33.6% of its earnings in the form of a dividend. Barclays pays out 22.8% 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. Associated Banc has increased its dividend for 13 consecutive years. Associated Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Associated Banc and Barclays”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated Banc	$2.46 billion	2.20	$474.78 million	$2.86	10.01
Barclays	$30.75 billion	0.27	$9.46 billion	$2.68	9.06

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Associated Banc and Barclays, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated Banc	0	6	6	0	2.50
Barclays	0	6	4	0	2.40

Associated Banc currently has a consensus price target of $31.90, indicating a potential upside of 11.38%. Given Associated Banc’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Associated Banc is more favorable than Barclays.

Summary

Associated Banc beats Barclays on 12 of the 17 factors compared between the two stocks.

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.

About Barclays

Barclays PLC provides various financial services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company operates through Barclays UK and Barclays International division segments. It offers financial services, such as retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. In addition, the company engages in securities dealing activities. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1690 and is headquartered in London, the United Kingdom.