Critical Analysis: Beacon Financial (NYSE:BBT) and Eastern Bankshares (NASDAQ:EBC)

Beacon Financial (NYSE:BBT – Get Free Report) and Eastern Bankshares (NASDAQ:EBC – Get Free Report) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Beacon Financial and Eastern Bankshares, as reported by MarketBeat.com.

Beacon Financial presently has a consensus price target of $32.50, indicating a potential upside of 8.70%. Eastern Bankshares has a consensus price target of $24.86, indicating a potential upside of 12.42%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, analysts plainly believe Eastern Bankshares is more favorable than Beacon Financial.

Valuation and Earnings

This table compares Beacon Financial and Eastern Bankshares”s top-line revenue, earnings per share and valuation.

Beacon Financial has higher earnings, but lower revenue than Eastern Bankshares. Eastern Bankshares is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.3%. Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastern Bankshares pays out 34.1% of its earnings in the form of a dividend. Eastern Bankshares has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

83.1% of Beacon Financial shares are held by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are held by institutional investors. 1.1% of Beacon Financial shares are held by company insiders. Comparatively, 1.3% of Eastern Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Beacon Financial has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Profitability

This table compares Beacon Financial and Eastern Bankshares’ net margins, return on equity and return on assets.

Summary

Eastern Bankshares beats Beacon Financial on 13 of the 17 factors compared between the two stocks.

About Beacon Financial

(Get Free Report)

Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.

About Eastern Bankshares

(Get Free Report)

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.