FS Bancorp (NASDAQ: FSBW) and Popular (NASDAQ:BPOP) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.
Risk and Volatility
FS Bancorp has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Popular has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for FS Bancorp and Popular, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FS Bancorp currently has a consensus price target of $46.33, suggesting a potential downside of 21.97%. Popular has a consensus price target of $46.75, suggesting a potential upside of 21.74%. Given Popular’s higher possible upside, analysts clearly believe Popular is more favorable than FS Bancorp.
Valuation and Earnings
This table compares FS Bancorp and Popular’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FS Bancorp||$61.59 million||3.54||$10.49 million||$4.19||14.17|
|Popular||$1.93 billion||2.03||$216.69 million||$1.96||19.59|
Popular has higher revenue and earnings than FS Bancorp. FS Bancorp is trading at a lower price-to-earnings ratio than Popular, indicating that it is currently the more affordable of the two stocks.
This table compares FS Bancorp and Popular’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
FS Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.7%. Popular pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. FS Bancorp pays out 10.5% of its earnings in the form of a dividend. Popular pays out 51.0% 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.
Institutional and Insider Ownership
42.7% of FS Bancorp shares are owned by institutional investors. Comparatively, 88.9% of Popular shares are owned by institutional investors. 13.2% of FS Bancorp shares are owned by company insiders. Comparatively, 1.3% of Popular shares are owned by company 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.
FS Bancorp Company Profile
FS Bancorp, Inc. is a holding company for 1st Security Bank of Washington (the Bank). The Company is a diversified lender with a focus on the origination of indirect home improvement loans, also referred to as fixture secured loans, commercial real estate mortgage loans, home loans, commercial business loans and second mortgage and home equity loan products. The Company operates through the community banking segment. The Bank is a relationship-driven community bank. The Bank offers banking and financial services to local families, local and regional businesses and various industries within distinct Puget Sound area communities. It offers a range of commercial real estate loans, which are secured by income producing properties, including retail centers, warehouses and office buildings located in the market areas. It offers a range of deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit.
Popular Company Profile
Popular, Inc. (Popular) is a financial holding company. The Company operates in two segments: Banco Popular de Puerto Rico (BPPR), which includes its Puerto Rico business, and Banco Popular North America (BPNA), which includes its the United States mainland business. The Company has operations in Puerto Rico, the United States and the Caribbean. The Company’s BPPR segment provides retail, mortgage and commercial banking services through its banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. The Company’s BPNA segment consists of Popular North America, Inc. (PNA) functioning as the holding company for its operations in the United States. It also operates PNA’s subsidiary, E-LOAN, Inc. The banking operations of BPNA in the United States mainland are based in New York, Florida and New Jersey, conducted under the name of Popular Community Bank.
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