Provident Financial Services (NYSE: PFS) and Associated Banc (NYSE:ASB) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.
This table compares Provident Financial Services and Associated Banc’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Provident Financial Services||24.75%||7.61%||1.02%|
This is a breakdown of recent ratings and recommmendations for Provident Financial Services and Associated Banc, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Provident Financial Services||0||4||2||0||2.33|
Provident Financial Services presently has a consensus target price of $28.10, suggesting a potential upside of 5.96%. Associated Banc has a consensus target price of $26.00, suggesting a potential downside of 1.89%. Given Provident Financial Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe Provident Financial Services is more favorable than Associated Banc.
Provident Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. Associated Banc pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Provident Financial Services pays out 52.6% of its earnings in the form of a dividend. Associated Banc pays out 42.0% 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. Provident Financial Services has increased its dividend for 2 consecutive years and Associated Banc has increased its dividend for 7 consecutive years.
Insider and Institutional Ownership
65.2% of Provident Financial Services shares are held by institutional investors. Comparatively, 76.8% of Associated Banc shares are held by institutional investors. 2.9% of Provident Financial Services shares are held by insiders. Comparatively, 1.8% of Associated Banc shares are held by 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.
Volatility and Risk
Provident Financial Services has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Associated Banc has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Earnings & Valuation
This table compares Provident Financial Services and Associated Banc’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Provident Financial Services||$379.54 million||4.67||$93.94 million||$1.52||17.45|
|Associated Banc||$1.22 billion||3.30||$229.26 million||$1.43||18.53|
Associated Banc has higher revenue and earnings than Provident Financial Services. Provident Financial Services is trading at a lower price-to-earnings ratio than Associated Banc, indicating that it is currently the more affordable of the two stocks.
Provident Financial Services beats Associated Banc on 10 of the 17 factors compared between the two stocks.
About Provident Financial Services
Provident Financial Services Inc. is a holding company for The Provident Bank (the Bank). The Bank is a New Jersey-chartered capital stock savings bank. As a community and customer-oriented institution, the Bank provides personal service and customer convenience in serving the financial needs of the individuals, families and businesses residing in its primary markets areas. The Bank attracts deposits from the general public and businesses in the areas surrounding its banking offices and uses those funds, together with funds generated from operations and borrowings, to originate commercial real estate loans, residential mortgage loans, commercial business loans and consumer loans. The Bank also invests in mortgage-backed securities and other permissible investments. It operates service branch offices in the New Jersey counties of Hudson, Bergen, Essex, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, as well as in Bucks, Lehigh and Northampton counties in Pennsylvania.
About Associated Banc
Associated Banc-Corp is a bank holding company. The Company, through its banking subsidiary Associated Bank, National Association (the Bank) and various nonbanking subsidiaries, provides a range of banking and non-banking products and services to individuals. The Company operates through three segments: Corporate and Commercial Specialty; Community, Consumer, and Business, and Risk Management and Shared Services. The Corporate and Commercial Specialty segment consists of lending and deposit solutions to businesses, developers, not-for-profits, municipalities and financial institutions. The Corporate and Commercial Specialty segment consists of lending and deposit solutions to businesses, developers, not-for-profits, municipalities and financial institutions. The Risk Management and Shared Services segment includes Corporate Risk Management, Credit Administration, Finance, Treasury, Operations and Technology, which are shared functions.
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