Mitsubishi UFJ Financial Group (NYSE: MTU) and TowneBank (NASDAQ:TOWN) are both mid-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
This table compares Mitsubishi UFJ Financial Group and TowneBank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Mitsubishi UFJ Financial Group||17.02%||6.82%||0.36%|
Mitsubishi UFJ Financial Group pays an annual dividend of $0.15 per share and has a dividend yield of 1.9%. TowneBank pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Mitsubishi UFJ Financial Group pays out 21.1% of its earnings in the form of a dividend. TowneBank pays out 36.8% 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. Mitsubishi UFJ Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for Mitsubishi UFJ Financial Group and TowneBank, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Mitsubishi UFJ Financial Group||0||1||2||0||2.67|
TowneBank has a consensus price target of $35.00, suggesting a potential upside of 8.19%. Given TowneBank’s higher probable upside, analysts clearly believe TowneBank is more favorable than Mitsubishi UFJ Financial Group.
Insider & Institutional Ownership
1.0% of Mitsubishi UFJ Financial Group shares are owned by institutional investors. Comparatively, 44.3% of TowneBank shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Mitsubishi UFJ Financial Group has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500. Comparatively, TowneBank has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.
Valuation & Earnings
This table compares Mitsubishi UFJ Financial Group and TowneBank’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Mitsubishi UFJ Financial Group||$52.56 billion||2.05||$1.88 billion||$0.71||11.31|
|TowneBank||$409.84 million||4.94||$67.25 million||$1.52||21.28|
Mitsubishi UFJ Financial Group has higher revenue and earnings than TowneBank. Mitsubishi UFJ Financial Group is trading at a lower price-to-earnings ratio than TowneBank, indicating that it is currently the more affordable of the two stocks.
TowneBank beats Mitsubishi UFJ Financial Group on 8 of the 15 factors compared between the two stocks.
Mitsubishi UFJ Financial Group Company Profile
Mitsubishi UFJ Financial Group, Inc. (MUFJ) is a bank holding company. The Company’s segments include Integrated Retail Banking Business Group, Integrated Corporate Banking Business Group, Integrated Trust Assets Business Group, Integrated Global Business Group and Krungsri. The Company’s services include commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and various fields of financial services. The Company’s subsidiaries include The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Holdings Co., Ltd. (MUSHD), Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (MUMSS) and Mitsubishi UFJ NICOS Co., Ltd. Its Retail Banking Business Group covers retail businesses, including commercial banking, trust banking and securities businesses, and offers a range of banking products and services, including financial consulting services, to retail customers in Japan.
TowneBank Company Profile
TowneBank is a community bank. The Bank offers personal banking services and business banking services. The Bank operates through three segments: Banking, Realty and Insurance. The Banking segment provides loan and deposit services to retail and commercial customers. The Realty segment provides residential real estate services, originations of a range of mortgage loans, resort property management, and residential and commercial title insurance. The Insurance segment provides property and casualty insurance, as well as employee and group benefits. The Bank provides checking accounts, cards, savings, money markets and certificate of deposits (CDs), mobile banking, financial management software, private banking and switch kit. The Bank also offers auto loans, home equity loans, construction loans, lot loans, recreational vehicles, mortgage loans, land acquisition loans, construction loans, development Loans, and personal loans and lines of credit.
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