Webster Financial Corporation (NYSE: WBS) and Banco Bradesco SA (NYSE:BBD) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Analyst Ratings

This is a summary of current ratings and target prices for Webster Financial Corporation and Banco Bradesco SA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Webster Financial Corporation 1 6 2 0 2.11
Banco Bradesco SA 0 1 2 0 2.67

Webster Financial Corporation currently has a consensus price target of $53.63, indicating a potential downside of 2.98%. Banco Bradesco SA has a consensus price target of $12.40, indicating a potential upside of 10.71%. Given Banco Bradesco SA’s stronger consensus rating and higher possible upside, analysts plainly believe Banco Bradesco SA is more favorable than Webster Financial Corporation.

Risk and Volatility

Webster Financial Corporation has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Banco Bradesco SA has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500.

Dividends

Webster Financial Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.9%. Banco Bradesco SA pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. Webster Financial Corporation pays out 41.1% of its earnings in the form of a dividend. Banco Bradesco SA pays out 7.9% 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. Webster Financial Corporation has raised its dividend for 3 consecutive years and Banco Bradesco SA has raised its dividend for 6 consecutive years.

Profitability

This table compares Webster Financial Corporation and Banco Bradesco SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Webster Financial Corporation 21.09% 9.89% 0.93%
Banco Bradesco SA 9.11% 17.89% 1.55%

Institutional and Insider Ownership

93.7% of Webster Financial Corporation shares are owned by institutional investors. Comparatively, 2.7% of Banco Bradesco SA shares are owned by institutional investors. 2.2% of Webster Financial Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Webster Financial Corporation and Banco Bradesco SA’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Webster Financial Corporation $976.03 million 5.21 $232.95 million $2.53 21.85
Banco Bradesco SA $22.47 billion 3.03 $4.65 billion $0.76 14.67

Banco Bradesco SA has higher revenue and earnings than Webster Financial Corporation. Banco Bradesco SA is trading at a lower price-to-earnings ratio than Webster Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Banco Bradesco SA beats Webster Financial Corporation on 9 of the 16 factors compared between the two stocks.

Webster Financial Corporation Company Profile

Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.

Banco Bradesco SA Company Profile

Banco Bradesco S.A. is a commercial bank. The Bank offers a range of banking and financial products and services in Brazil and abroad to individuals, large, mid-sized and small companies, and local and international corporations and institutions. Its segments include Financial; Insurance and Capitalization bonds; Pension plans, and Other Activities. The Financial segment consists of financial institutions and holding companies, which are responsible for managing financial resources, and credit card, consortium and asset management companies. The Insurance Group segment comprises insurance, pension plan and capitalization bond companies. It offers banking services, including deposit-taking activities, individual and corporate banking services, credit and debit cards, leasing operations, investment banking, asset management, consortium services and others. Its insurance services include health insurance, life and personal accident insurance, automobile, casualty and pension plans.

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