Critical Survey: Peapack-Gladstone Financial (NASDAQ:PGC) versus HDFC Bank (NYSE:HDB)

Peapack-Gladstone Financial (NASDAQ:PGC) and HDFC Bank (NYSE:HDB) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Profitability

This table compares Peapack-Gladstone Financial and HDFC Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peapack-Gladstone Financial	8.50%	5.94%	0.53%
HDFC Bank	14.69%	12.64%	1.70%

Earnings and Valuation

This table compares Peapack-Gladstone Financial and HDFC Bank’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peapack-Gladstone Financial	$377.59 million	1.21	$48.85 million	$2.18	11.76
HDFC Bank	$2,360.44 billion	0.05	$7.75 billion	$3.26	18.63

HDFC Bank has higher revenue and earnings than Peapack-Gladstone Financial. Peapack-Gladstone Financial is trading at a lower price-to-earnings ratio than HDFC Bank, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.8% of Peapack-Gladstone Financial shares are held by institutional investors. Comparatively, 17.6% of HDFC Bank shares are held by institutional investors. 7.6% of Peapack-Gladstone Financial shares are held by insiders. Comparatively, 1.0% of HDFC Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Peapack-Gladstone Financial has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, HDFC Bank has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Dividends

Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. HDFC Bank pays an annual dividend of $0.59 per share and has a dividend yield of 1.0%. Peapack-Gladstone Financial pays out 9.2% of its earnings in the form of a dividend. HDFC Bank pays out 18.1% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Peapack-Gladstone Financial and HDFC Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peapack-Gladstone Financial	0	1	1	0	2.50
HDFC Bank	0	1	0	1	3.00

Peapack-Gladstone Financial presently has a consensus price target of $32.00, suggesting a potential upside of 24.80%. Given Peapack-Gladstone Financial’s higher possible upside, equities analysts plainly believe Peapack-Gladstone Financial is more favorable than HDFC Bank.

Summary

HDFC Bank beats Peapack-Gladstone Financial on 10 of the 17 factors compared between the two stocks.

About Peapack-Gladstone Financial

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Peapack Private. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential mortgages, home equity lines of credit, and other second mortgage loans. In addition, it offers corporate and industrial (C&I) and equipment finance, commercial real estate, multifamily, residential, and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; investment management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; and other financial planning, tax preparation, and advisory services. Further, the company provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates; and commercial loan clients include business owners, professionals, retailers, contractors, and real estate investors. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and branches in Somerset, Morris, Hunterdon, and Union counties, as well as operates automated teller machines. Peapack-Gladstone Financial Corporation was founded in 1921 and is headquartered in Bedminster, New Jersey.

About HDFC Bank

HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.