Contrasting CIT Group (CIT) & Northwest Bancshares (NWBI)

CIT Group (NYSE: CIT) and Northwest Bancshares (NASDAQ:NWBI) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Valuation and Earnings

This table compares CIT Group and Northwest Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CIT Group $3.21 billion 2.07 $468.20 million $3.07 16.98
Northwest Bancshares $469.34 million 3.91 $94.46 million $0.84 21.30

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

Risk and Volatility

CIT Group has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Dividends

CIT Group pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. Northwest Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 3.8%. CIT Group pays out 20.8% of its earnings in the form of a dividend. Northwest Bancshares pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for CIT Group and Northwest Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CIT Group 0 7 7 0 2.50
Northwest Bancshares 0 2 0 0 2.00

CIT Group currently has a consensus target price of $54.55, suggesting a potential upside of 4.63%. Northwest Bancshares has a consensus target price of $17.00, suggesting a potential downside of 4.97%. Given CIT Group’s stronger consensus rating and higher possible upside, analysts plainly believe CIT Group is more favorable than Northwest Bancshares.

Insider and Institutional Ownership

96.8% of CIT Group shares are held by institutional investors. Comparatively, 68.3% of Northwest Bancshares shares are held by institutional investors. 0.3% of CIT Group shares are held by company insiders. Comparatively, 2.2% of Northwest Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares CIT Group and Northwest Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CIT Group 11.93% 7.76% 1.08%
Northwest Bancshares 21.53% 7.78% 0.99%

Summary

CIT Group beats Northwest Bancshares on 10 of the 16 factors compared between the two stocks.

CIT Group Company Profile

CIT Group Inc. operates as the bank holding company for CIT Bank, National Association that provides banking and related services to commercial and individual customers. The company operates through three segments: Commercial Banking, Consumer Banking, and Non-Strategic Portfolios (NSP). The Commercial Banking segment offers lending, leasing, and other financial and advisory services primarily to small and middle-market companies; factoring, receivables management products, and secured supply chain financing; and equipment leasing and secured financing to railroads and non-rail companies. The Consumer Banking segment provides mortgage loans and deposits. It accepts deposits, including checking and savings accounts, money market accounts, and certificates of deposit; and offers residential mortgage and small business administration loans, and reverse mortgages, as well as fiduciary services. The NSP segment provides equipment financing, secured lending, and leasing and advisory services to small and middle-market businesses. The company also offers online banking services. It operates through a network of 70 branches located in southern California. CIT Group Inc. was founded in 1908 and is headquartered in Livingston, New Jersey.

Northwest Bancshares Company Profile

Northwest Bancshares, Inc. operates as a bank holding company for Northwest Savings Bank that offers various personal and business banking solutions in the United States. The company offers personal and business deposits, such as checking, savings, money market deposit, term certificate, and individual retirement accounts. Its loan portfolio comprise one-to-four family residential real estate, residential mortgage, short term consumer, multi-family residential and commercial real estate, commercial business, and home equity loans; lines of credit; and consumer loans, including automobile, sales finance, unsecured personal, and credit card loans, as well as loans secured by deposit accounts. In addition, the company offers employee benefit, property, and casualty insurance services; and trust, investment management, and brokerage services. As of December 31, 2017, it operated 172 community-banking locations in central and western Pennsylvania, western New York, and eastern Ohio. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Warren, Pennsylvania.

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