Wells Fargo & Company (NYSE: WFC – Get Rating) and Financial Institutions (NASDAQ: FISI – Get Rating) are both finance companies, but which is the best investment? We’ll compare the two companies based on valuation strength, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Volatility and risk
Wells Fargo & Company has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, financial institutions have a beta of 1.04, indicating that the stock price of its stock is 4% more volatile than the S&P 500.
Benefits and evaluation
This chart compares gross revenue, earnings per share, and valuation of Wells Fargo & Company and financial institutions.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Wells Fargo and company||$82.41 billion||1.98||$21.55 billion||$4.81||8.96|
|Financial institutions||$214.11 million||1.98||$77.70 million||$4.44||6.16|
Wells Fargo & Company has higher revenues and profits than financial institutions. Financial Institutions trades at a lower price-to-earnings ratio than Wells Fargo & Company, indicating that it is currently the more affordable of the two stocks.
Wells Fargo & Company pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Financial Institutions pays an annual dividend of $1.16 per share and has a dividend yield of 4.2%. Wells Fargo & Company pays 20.8% of its earnings as a dividend. Financial institutions pay out 26.1% of their profits in the form of dividends. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Wells Fargo & Company has increased its dividend for 2 consecutive years and Financial Institutions has increased its dividend for 13 consecutive years. Financial institutions are clearly the best dividend-paying stocks, given their higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
74.0% of Wells Fargo & Company shares are held by institutional investors. In comparison, 68.8% of the shares of financial institutions are held by institutional investors. 0.1% of Wells Fargo & Company stock is held by insiders of the company. By comparison, 2.0% of the shares of financial institutions are held by insiders of the company. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a company is poised for long-term growth.
This chart compares the net margins, return on equity, and return on assets of Wells Fargo & Company and financial institutions.
|Net margins||Return on equity||return on assets|
|Wells Fargo and company||25.35%||12.20%||1.06%|
This is a summary of current ratings and price targets for Wells Fargo & Company and financial institutions, as provided by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Wells Fargo and company||0||4||14||0||2.78|
|Financial institutions||0||0||0||0||N / A|
Wells Fargo & Company currently has a consensus price target of $58.29, indicating a potential upside of 35.31%. Given Wells Fargo & Company’s likely higher upside, research analysts clearly believe that Wells Fargo & Company is more favorable than financial institutions.
Wells Fargo & Company beat financial institutions on 9 out of 16 factors compared between the two stocks.
Wells Fargo & Company Corporate Profile (Get an evaluation)
Wells Fargo & Company, a diversified financial services company, offers banking, investment, mortgage, consumer and commercial finance products and services in the United States and around the world. It operates through four segments: Consumer Banking and Lending; The Commercial Bank; Corporate and investment banking; and wealth and investment management. The Consumer Banking and Lending segment offers diversified financial products and services to consumers and small businesses. Its financial products and services include checking and savings accounts, credit and debit cards, as well as home, auto, personal and small business loan services. The Commercial Banking segment provides financial solutions to private, family businesses and certain public companies. Its products and services include banking and credit products in various industrial and municipal sectors, secured lending and leasing products and cash management services. The Corporate and Investment Banking segment provides a range of capital markets, banking and financial products and services to corporate, commercial real estate, government and institutional clients. Its products and services include corporate banking, investment banking, cash management, commercial real estate lending and services, equity and fixed income solutions, as well as sales, negotiation and research. The Wealth Management and Investments segment provides customized wealth management, brokerage, financial planning, lending, private banking, trust and trust products and services to high net worth, high net worth and ultra high net worth clients. It also operates through financial advisors. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.
Financial Institutions Business Profile (Get an evaluation)
Financial Institutions, Inc. operates as a holding company for Five Star Bank, a chartered bank that provides banking and financial services to individuals, municipalities, and businesses in New York City. The company offers checking and savings account programs, including money market accounts, certificates of deposit, sweeping investment and individual retirement accounts and other qualified plan accounts. Its lending products include term loans and lines of credit; short- and medium-term commercial loans for working capital, business expansion and the purchase of equipment; commercial loans to the agricultural industry; commercial mortgages; residential mortgages for one to four families, home improvement loans, closed-end home equity loans and home equity lines of credit; and consumer loans, such as auto loans, secured installment loans, and personal loans. The Company also offers personal insurance products, including auto, home, boat, recreational vehicle, landlord and umbrella insurance; commercial insurance consisting of property, liability, auto, inland marine, workers’ compensation, bond, crop and umbrella insurance products; and financial services including life and disability insurance, health supplements, long-term care, annuities, mutual funds and retirement programs. In addition, it offers personalized investment advisory, wealth management, investment advisory and pension plan services, as well as a real estate investment trust that holds residential mortgages and commercial real estate loans. The company operates a network of 48 banking offices in Allegany, Cattaraugus, Cayuga, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Schuyler, Steuben, Wayne, Wyoming and Yates, New York counties. . Financial Institutions, Inc. was founded in 1817 and is headquartered in Warsaw, New York.
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