Financial Review: Ally Financial (ALLY) and Its Peers

Ally Financial (NYSE: ALLY) is one of 28 public companies in the “Nondepository credit institutions” industry, but how does it weigh in compared to its peers? We will compare Ally Financial to related companies based on the strength of its institutional ownership, risk, earnings, valuation, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for Ally Financial and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ally Financial 1 3 12 0 2.69
Ally Financial Competitors 157 712 962 41 2.47

Ally Financial presently has a consensus target price of $33.00, indicating a potential upside of 21.28%. As a group, “Nondepository credit institutions” companies have a potential downside of 2.36%. Given Ally Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Ally Financial is more favorable than its peers.

Valuation & Earnings

This table compares Ally Financial and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Ally Financial $9.87 billion $929.00 million 11.38
Ally Financial Competitors $6.70 billion $705.22 million 11.49

Ally Financial has higher revenue and earnings than its peers. Ally Financial is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Ally Financial pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. Ally Financial pays out 21.8% of its earnings in the form of a dividend. As a group, “Nondepository credit institutions” companies pay a dividend yield of 2.5% and pay out 31.9% of their earnings in the form of a dividend.

Risk and Volatility

Ally Financial has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Ally Financial’s peers have a beta of 1.49, meaning that their average stock price is 49% more volatile than the S&P 500.

Profitability

This table compares Ally Financial and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ally Financial 13.73% 8.10% 0.66%
Ally Financial Competitors 18.42% -2.06% -0.73%

Insider and Institutional Ownership

51.6% of shares of all “Nondepository credit institutions” companies are owned by institutional investors. 0.2% of Ally Financial shares are owned by company insiders. Comparatively, 16.9% of shares of all “Nondepository credit institutions” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Ally Financial beats its peers on 8 of the 15 factors compared.

Ally Financial Company Profile

Ally Financial Inc. provides various financial products and services for consumers, businesses, automotive dealers, and corporate clients in the United States and Canada. The company operates Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment provides automotive financing services to consumers and automotive dealers. Its automotive finance services include providing retail installment sales contracts, loans and leases, term loans to dealers, financing dealer floorplans, other lines of credit to dealers, warehouse lines to companies, and fleet financing. This segment also offers financing services to companies and municipalities for the purchase or lease of vehicles and equipment, and vehicle remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. The Mortgage Finance Operations segment manages held-for-investment consumer mortgage finance loan portfolio that includes bulk purchases of high-quality jumbo and LMI mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies. Its primary focus is on businesses owned by private equity sponsors with loans used for leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital. The company, through its subsidiary, Ally Bank, also offers commercial banking products and services. In addition, it provides digital wealth management and online brokerage platform services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is headquartered in Detroit, Michigan.

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