Preferred Bank (NASDAQ:PFBC – Get Rating) and Associated Banc (NYSE:ASB – Get Rating) are both finance companies, but which is the best investment? We will compare the two companies based on their risk strength, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.
Valuation and benefits
This table compares the gross revenue, earnings per share (EPS), and valuation of Preferred Bank and Associated Banc.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Preferred bank||$218.78 million||4.69||$95.24 million||$6.74||10.11|
|Associated bank||$1.13 billion||2.60||$350.99 million||$2.08||9:40 a.m.|
Associated Banc has higher revenue and profit than Preferred Bank. Associated Banc is trading at a lower price-to-earnings ratio than Preferred Bank, indicating that it is currently the more affordable of the two stocks.
This table compares the net margins, return on equity and return on assets of Preferred Bank and Associated Banc.
|Net margins||Return on equity||return on assets|
Institutional and Insider Ownership
73.2% of Preferred Bank shares are held by institutional investors. By comparison, 77.3% of Associated Banc’s shares are held by institutional investors. 3.0% of Associated Banc shares are held by insiders. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock is ripe for long-term growth.
Preferred Bank pays an annual dividend of $1.72 per share and has a dividend yield of 2.5%. Associated Banc pays an annual dividend of $0.80 per share and has a dividend yield of 4.1%. Preferred Bank pays 25.5% of its profits as a dividend. Associated Banc distributes 38.5% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Preferred Bank has increased its dividend for 1 consecutive year and Associated Banc has increased its dividend for 1 consecutive year.
This is a summary of recent recommendations for Preferred Bank and Associated Banc, as provided by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
Preferred Bank currently has a consensus price target of $89.60, indicating a potential upside of 32.11%. Associated Banc has a consensus price target of $24.60, indicating a potential upside of 25.96%. Given Preferred Bank’s higher consensus rating and higher likely upside potential, equity analysts clearly believe that Preferred Bank is more favorable than Associated Banc.
Risk and Volatility
Preferred Bank has a beta of 1.25, which means its stock price is 25% more volatile than the S&P 500. In comparison, Associated Banc has a beta of 1.04, which means its stock price is 4% more volatile than the S&P 500.
Preferred Bank beats Associated Banc on 11 of the 16 factors compared between the two stocks.
Preferred banking company profile (Get an assessment)
Preferred Bank provides a variety of commercial banking products and services to small and medium-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals and high net worth individuals in the United States. The company accepts checking, savings and money market deposit accounts; fixed-rate, fixed-maturity certificates of deposit for individuals and individuals; and individual retirement accounts. It also provides real estate mortgage loans secured by commercial, industrial, office, special purpose, and single and multi-family residential properties; housing construction loans; and commercial loans including working capital lines of credit, term loans for capital expenditures and commercial and standby letters of credit; and SBA loans. In addition, the Company offers trade finance services, including trade and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/ trust receipts, export financing, documentary collections and invoice purchase programs. Also, it provides various banking services to wealthy individuals residing in the Pacific Rim area; and remote deposit taking, and online and mobile banking. In addition, the company offers various banking services to doctors, accountants, lawyers, business owners and other professionals; and safe deposit boxes, account reconciliation, courier service and cash management services to manufacturing, service and distribution companies. As of December 31, 2021, it had eleven full-service branches in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana and San Francisco; and a branch in Flushing, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.
Company Profile Associated Banc (Get an assessment)
Associated Banc-Corp, a bank holding company, provides various banking and non-banking products to individuals and businesses in Wisconsin, Illinois and Minnesota. The Company operates through three segments: Corporate and Commercial Specialty; Community, Consumers and Businesses; and risk management and shared services. Its Corporate and Commercial Specialty segment offers lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leases, asset-based loans and loan syndications; deposit and cash management solutions, such as commercial check and interest-bearing deposit products, safe deposit and night deposit services, liquidity solutions, debt and receivables solutions and services of information ; specialized financial services such as interest rate risk management, foreign exchange solutions and commodity hedging; fiduciary services such as administration of pension, profit sharing and other employee benefit plans, trustee and corporate agency services and institutional asset management; and investable fund solutions such as savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full service, discount and online investment brokerage; investment advisory services; and trust and investment management accounts. The Company’s Community, Consumer and Business segment offers lending solutions, such as residential mortgages, home equity loans and lines of credit, personal and installment loans, auto loans, business loans and commercial lines of credit; and deposit and transactional solutions such as checks, credit, debit and prepaid cards, online banking and bill payment; and money transfer services. As of December 31, 2021, the company operated 215 bank branches. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.
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