Comparing Regions Financial (NYSE:RF) & Bank of the James Financial Group (NASDAQ:BOTJ)

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

Insider and Institutional Ownership

79.4% of Regions Financial shares are held by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are held by institutional investors. 0.3% of Regions Financial shares are held by insiders. Comparatively, 11.9% of Bank of the James Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Regions Financial and Bank of the James Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	3	8	7	0	2.22
Bank of the James Financial Group	0	1	0	0	2.00

Regions Financial currently has a consensus price target of $30.73, suggesting a potential upside of 4.71%. Given Regions Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Regions Financial is more favorable than Bank of the James Financial Group.

Earnings & Valuation

This table compares Regions Financial and Bank of the James Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.61	$2.16 billion	$2.40	12.23
Bank of the James Financial Group	$62.51 million	1.78	$9.02 million	$2.42	10.14

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

Dividends

Regions Financial pays an annual dividend of $1.06 per share and has a dividend yield of 3.6%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Regions Financial pays out 44.2% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 16.5% 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. Regions Financial has raised its dividend for 12 consecutive years and Bank of the James Financial Group has raised its dividend for 5 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Regions Financial has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Bank of the James Financial Group has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.

Profitability

This table compares Regions Financial and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	23.13%	12.70%	1.40%
Bank of the James Financial Group	17.17%	14.13%	1.06%

Summary

Regions Financial beats Bank of the James Financial Group on 13 of the 17 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.