PennyMac Financial Services (NYSE: PFSI) and Meta Financial Group (NASDAQ:CASH) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Insider & Institutional Ownership

86.6% of PennyMac Financial Services shares are held by institutional investors. Comparatively, 74.2% of Meta Financial Group shares are held by institutional investors. 45.6% of PennyMac Financial Services shares are held by company insiders. Comparatively, 6.1% of Meta Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares PennyMac Financial Services and Meta Financial Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PennyMac Financial Services $1.24 billion 0.32 $69.82 million $2.97 5.67
Meta Financial Group $238.92 million 2.99 $49.55 million $5.30 14.42

PennyMac Financial Services has higher revenue and earnings than Meta Financial Group. PennyMac Financial Services is trading at a lower price-to-earnings ratio than Meta Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PennyMac Financial Services and Meta Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PennyMac Financial Services 6.87% 4.79% 1.21%
Meta Financial Group 18.74% 16.60% 1.58%

Analyst Ratings

This is a breakdown of current recommendations for PennyMac Financial Services and Meta Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PennyMac Financial Services 1 1 4 0 2.50
Meta Financial Group 0 1 1 0 2.50

PennyMac Financial Services currently has a consensus price target of $20.25, suggesting a potential upside of 20.18%. Meta Financial Group has a consensus price target of $108.00, suggesting a potential upside of 41.27%. Given Meta Financial Group’s higher possible upside, analysts clearly believe Meta Financial Group is more favorable than PennyMac Financial Services.

Dividends

Meta Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. PennyMac Financial Services does not pay a dividend. Meta Financial Group pays out 9.8% of its earnings in the form of a dividend.

Risk and Volatility

PennyMac Financial Services has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Meta Financial Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Summary

Meta Financial Group beats PennyMac Financial Services on 9 of the 15 factors compared between the two stocks.

PennyMac Financial Services Company Profile

PennyMac Financial Services, Inc. (PFSI) is a financial services company. The Company is focused on the production and servicing of the United States residential mortgage loans and the management of investments related to the United States mortgage market. The Company operates through three segments: loan production, loan servicing and investment management. PFSI’s mortgage banking subsidiary, PennyMac Loan Services, LLC (PLS), is a non-bank producer and servicer of mortgage loans in the United States. As of December 31, 2016, PLS serviced loans in all 50 states, the District of Columbia, Guam and the United States Virgin Islands, and originated loans in 49 states and the District of Columbia. PFSI’s investment management subsidiary, PNMAC Capital Management, LLC (PCM), is an investment advisor. PLS is a seller and servicer for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

Meta Financial Group Company Profile

Meta Financial Group, Inc. is a unitary savings and loan holding company. The Company operates through its banking subsidiary, MetaBank (the Bank). Its segments include Payments, Banking, and Corporate Services/Other. MetaBank is both a community-oriented financial institution offering a range of financial services to meet the needs of the communities it serves and a payments company providing services on a nationwide basis. It operates in both the banking and payments industries through MetaBank, its retail banking operation; Meta Payment Systems (MPS), its electronic payments division; AFS/IBEX Financial Services Inc. (AFS/IBEX), its insurance premium financing division, and Refund Advantage, EPS Financial, LLC (EPS) Financial and Specialty Consumer Services, its tax-related financial solutions divisions.

Receive News & Ratings for PennyMac Financial Services Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for PennyMac Financial Services Inc. and related companies with MarketBeat.com's FREE daily email newsletter.