Webster Financial (NYSE: WBS) is one of 305 public companies in the “Banks” industry, but how does it contrast to its peers? We will compare Webster Financial to similar businesses based on the strength of its earnings, dividends, analyst recommendations, valuation, risk, institutional ownership and profitability.

Institutional & Insider Ownership

93.5% of Webster Financial shares are owned by institutional investors. Comparatively, 52.2% of shares of all “Banks” companies are owned by institutional investors. 2.2% of Webster Financial shares are owned by insiders. Comparatively, 10.4% of shares of all “Banks” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Webster Financial and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Webster Financial 1 6 2 0 2.11
Webster Financial Competitors 2159 8377 8436 332 2.36

Webster Financial currently has a consensus target price of $54.88, indicating a potential downside of 3.34%. As a group, “Banks” companies have a potential upside of 2.47%. Given Webster Financial’s peers stronger consensus rating and higher probable upside, analysts plainly believe Webster Financial has less favorable growth aspects than its peers.

Profitability

This table compares Webster Financial and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Webster Financial 21.09% 9.89% 0.93%
Webster Financial Competitors 18.68% 8.36% 0.93%

Valuation and Earnings

This table compares Webster Financial and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Webster Financial $1.09 billion $207.12 million 22.44
Webster Financial Competitors $5.50 billion $827.87 million 379.23

Webster Financial’s peers have higher revenue and earnings than Webster Financial. Webster Financial is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Webster Financial pays an annual dividend of $1.04 per share and has a dividend yield of 1.8%. Webster Financial pays out 41.1% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 2.0% and pay out 35.2% of their earnings in the form of a dividend. Webster Financial has increased its dividend for 6 consecutive years. Webster Financial lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Webster Financial has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Webster Financial’s peers have a beta of 0.79, meaning that their average stock price is 21% less volatile than the S&P 500.

Summary

Webster Financial peers beat Webster Financial on 11 of the 15 factors compared.

Webster Financial 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.

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