Veritex (VBTX) and Regions Financial (RF) Critical Survey

Veritex (NASDAQ: VBTX) and Regions Financial (NYSE:RF) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Institutional and Insider Ownership

62.0% of Veritex shares are held by institutional investors. Comparatively, 76.8% of Regions Financial shares are held by institutional investors. 6.9% of Veritex shares are held by company insiders. Comparatively, 0.5% of Regions Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Veritex and Regions Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veritex 18.67% 5.71% 0.97%
Regions Financial 20.48% 7.87% 1.00%

Volatility & Risk

Veritex has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Dividends

Regions Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Veritex does not pay a dividend. Regions Financial pays out 36.0% of its earnings in the form of a dividend. Veritex has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Veritex and Regions Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veritex 0 0 4 0 3.00
Regions Financial 2 16 4 2 2.25

Veritex currently has a consensus target price of $32.13, suggesting a potential upside of 16.90%. Regions Financial has a consensus target price of $17.20, suggesting a potential downside of 7.03%. Given Veritex’s stronger consensus rating and higher probable upside, research analysts plainly believe Veritex is more favorable than Regions Financial.

Earnings and Valuation

This table compares Veritex and Regions Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veritex $87.13 million 7.60 $16.26 million $0.87 31.59
Regions Financial $6.09 billion 3.44 $1.26 billion $1.00 18.50

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

Summary

Regions Financial beats Veritex on 9 of the 17 factors compared between the two stocks.

About Veritex

Veritex Holdings, Inc. is a bank holding company. The Company, through its subsidiary, Veritex Community Bank (the Bank), a Texas state chartered bank, provides relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. It operates through community banking segment. The Bank provides a range of banking services to individual and corporate customers, which include commercial and retail lending, and the acceptance of checking and savings deposits. It offers a suite of online banking solutions, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements, as well as automated teller machines, and banking by telephone, mail and personal appointment. It also offers debit cards, direct deposit, cashier’s checks and letters of credit, as well as treasury management services, including wire transfer services and automated clearinghouse services.

About Regions Financial

Regions Financial Corporation is a financial holding company. The Company conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank, which is a member of the Federal Reserve System. It operates in three segments: Corporate Bank, which represents its commercial banking functions, including commercial and industrial, commercial real estate and investor real estate lending; Consumer Bank, which represents its branch network, including consumer banking products and services related to residential first mortgages, home equity lines and loans, small business loans, indirect loans, consumer credit cards and other consumer loans, as well as the corresponding deposit relationships, and Wealth Management, which offers individuals, businesses, governmental institutions and non-profit entities a range of solutions to enable transfer of wealth. It provides traditional commercial, retail and mortgage banking services, as well as other financial services.

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