Critical Analysis: International Bancshares (IBOC) vs. Provident Financial (PROV)
Provident Financial (NASDAQ: PROV) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.
Institutional & Insider Ownership
60.2% of Provident Financial shares are owned by institutional investors. Comparatively, 57.0% of International Bancshares shares are owned by institutional investors. 12.7% of Provident Financial shares are owned by insiders. Comparatively, 17.9% of International Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Provident Financial has a beta of -0.01, meaning that its stock price is 101% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Provident Financial and International Bancshares, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Provident Financial currently has a consensus price target of $20.00, suggesting a potential upside of 6.10%. Given Provident Financial’s higher probable upside, analysts clearly believe Provident Financial is more favorable than International Bancshares.
This table compares Provident Financial and International Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Provident Financial and International Bancshares’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Provident Financial||$73.24 million||1.96||$5.20 million||$0.41||45.98|
|International Bancshares||$549.62 million||4.81||$133.93 million||$2.21||18.10|
International Bancshares has higher revenue and earnings than Provident Financial. International Bancshares is trading at a lower price-to-earnings ratio than Provident Financial, indicating that it is currently the more affordable of the two stocks.
Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. International Bancshares pays an annual dividend of $0.66 per share and has a dividend yield of 1.7%. Provident Financial pays out 136.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. International Bancshares pays out 29.9% of its earnings in the form of a dividend.
International Bancshares beats Provident Financial on 10 of the 14 factors compared between the two stocks.
Provident Financial Company Profile
Provident Financial Holdings, Inc. is the holding company of Provident Savings Bank, F.S.B. (the Bank). The Bank is a federally chartered stock savings bank. The Company operates through two segments: Provident Bank and Provident Bank Mortgage (PBM). The Bank’s operations primarily consist of accepting deposits from customers within the communities surrounding the Bank’s full service offices and investing those funds in single-family loans, multi-family loans, commercial real estate loans, construction loans, commercial business loans, consumer loans and other mortgage loans. PBM operations primarily consist of the origination, purchase and sale of mortgage loans secured by single-family residences. The Bank is a financial services company committed to serving consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The Bank offers business checking accounts, other business banking services and services loans for others.
International Bancshares Company Profile
International Bancshares Corporation is a financial holding company. The Company, through its subsidiaries, is primarily engaged in the business of banking, including the acceptance of checking and savings deposits, and the making of commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The primary markets of the Company are South, Central and Southeast Texas, an area bordered on the east by the Galveston area, to the northwest by Round Rock, to the southwest by Del Rio and to the southeast by Brownsville, as well as the State of Oklahoma. Its banking subsidiaries facilitate international trade along the United States’ border with Mexico and elsewhere. The Bank’s subsidiaries primarily focus on providing commercial banking services to small and medium sized businesses located in their trade areas. The Company’s bank subsidiaries include International Bank of Commerce (IBC); Commerce Bank, and International Bank of Commerce, Zapata.
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