Comparing Umpqua (UMPQ) and BofI (BOFI)

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Umpqua (NASDAQ:UMPQ) and BofI (NASDAQ:BOFI) 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, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

88.5% of Umpqua shares are owned by institutional investors. Comparatively, 75.3% of BofI shares are owned by institutional investors. 1.0% of Umpqua shares are owned by company insiders. Comparatively, 6.5% of BofI shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Umpqua and BofI’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Umpqua $1.22 billion 3.78 $246.01 million $1.07 19.51
BofI $546.02 million 3.96 $152.41 million $2.48 13.87

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

Analyst Ratings

This is a summary of recent recommendations for Umpqua and BofI, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Umpqua 1 5 4 0 2.30
BofI 0 2 7 0 2.78

Umpqua presently has a consensus price target of $24.18, suggesting a potential upside of 15.81%. BofI has a consensus price target of $41.63, suggesting a potential upside of 21.04%. Given BofI’s stronger consensus rating and higher probable upside, analysts clearly believe BofI is more favorable than Umpqua.

Dividends

Umpqua pays an annual dividend of $0.84 per share and has a dividend yield of 4.0%. BofI does not pay a dividend. Umpqua pays out 78.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Umpqua has increased its dividend for 7 consecutive years.

Profitability

This table compares Umpqua and BofI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Umpqua 22.53% 7.11% 1.10%
BofI 27.87% 17.79% 1.73%

Risk and Volatility

Umpqua has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, BofI has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.

Summary

BofI beats Umpqua on 10 of the 17 factors compared between the two stocks.

Umpqua Company Profile

Umpqua Holdings Corporation, through its subsidiaries, provides commercial and retail banking, and retail brokerage services. It operates through four segments: Commercial Bank, Wealth Management, Retail Bank, and Home Lending. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit. It also provides loans for business and commercial customers, such as accounts receivable and inventory financing, multi-family and equipment loans, commercial equipment leases, international trade, real estate construction loans, permanent financing products, small business administration program financing, and residential mortgage loans, as well as capital markets and treasury management services. In addition, the company offers loan products for small businesses; commercial and industrial loans; residential real estate loans for the construction, purchase, and refinancing of residential owner-occupied and rental properties; and consumer loans comprising secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans. Further, it provides financial planning, trust, and investment services; broker dealer and investment advisory services; and technology-based services that include remote deposit capture, online banking, bill pay and treasury, mobile banking, voice response banking, automatic payroll deposit program, ATM, interactive product kiosks, and Website services. The company serves small businesses, middle market, and large commercial customers; individual investors; and high net worth individuals. As of December 31, 2017, it operated commercial banking centers in 333 locations in Oregon, Washington, California, Idaho, and Nevada. The company was founded in 1953 and is headquartered in Portland, Oregon.

BofI Company Profile

BofI Holding, Inc. operates as the holding company for BofI Federal Bank that provides consumer and business banking products in the United States. The company offers deposits products, including consumer and business checking, demand, savings, and time deposit accounts. It also provides single family and multifamily mortgage secured lending products; commercial real estate secured and commercial lending products; specialty finance factoring products; prime loans to customers secured by new and used automobiles; and term unsecured personal loans to individual borrowers, as well as overdraft lines of credit. In addition, the company offers prepaid card and refund transfer, debit card or ATM card, portfolio management, online bill payment, money transfer, overdraft protection, online and mobile banking, and text message banking services. BofI Holding, Inc. was incorporated in 1999 and is based in San Diego, California.

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