National bank of Canada (OTCMKTS: NTIOF – Get a rating) and VersaBank (NASDAQ: VBNK – Get a rating) are both finance companies, but which is the better investment? We’ll compare the two companies based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
National Bank of Canada pays an annual dividend of $2.75 per share and has a dividend yield of 3.8%. VersaBank pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. The National Bank of Canada pays 36.5% of its profits in the form of dividends. VersaBank pays 10.8% 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.
This table compares the net margins, return on equity and return on assets of National Bank of Canada and VersaBank.
|Net margins||Return on equity||return on assets|
|National bank of Canada||29.48%||21.16%||0.94%|
Valuation and benefits
This table compares the revenue, earnings per share (EPS) and valuation of National Bank of Canada and VersaBank.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|National bank of Canada||$8.85 billion||2.73||$2.53 billion||$7.54||9.53|
|VersaBank||$75.30 million||3.21||$17.80 million||$0.74||11.91|
National Bank of Canada has higher revenue and profit than VersaBank. National Bank of Canada trades at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
0.1% of National Bank of Canada shares are held by institutional investors. By comparison, 24.3% of VersaBank shares are held by institutional investors. Strong institutional ownership indicates that hedge funds, large money managers, and endowments believe a company is poised for long-term growth.
This is a summary of current recommendations and price targets for National Bank of Canada and VersaBank, as provided by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|National bank of Canada||2||3||5||0||2h30|
National Bank of Canada currently has a consensus target price of $106.10, suggesting a potential upside of 47.71%. Given National Bank of Canada’s likely higher upside, analysts clearly believe that National Bank of Canada is more favorable than VersaBank.
National Bank of Canada beats VersaBank on 8 of 15 factors compared between the two stocks.
National Bank of Canada Corporate Profile (Get a rating)
National Bank of Canada offers various financial products and services to retail, commercial, corporate and institutional clients in Canada and abroad. It operates through four segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. and International Specialty Finance. The Personal and Business segment offers personal banking services, including transaction solutions, mortgages and home equity lines of credit, consumer loans, payment solutions and savings and investment solutions. ; various insurance products; and commercial banking services include credit, deposit and investment solutions, as well as international trade, foreign exchange, payroll, cash management, insurance, electronic transactions and complementary services. The Wealth Management segment includes investment solutions, trust services, banking services, lending services and other wealth management solutions. The Financial Markets segment offers corporate banking, advisory and capital markets services; and project finance, debt and equity underwriting; advisory services in the fields of mergers and acquisitions and financing. The US Specialty Finance and International segment provides specialty finance products; financial products and services for individuals and businesses in Cambodia; and investment solutions, guaranteed investment certificates, mutual funds, notes, structured products and monetization. It offers its services through a network of 384 branches and 927 ATMs. National Bank of Canada was founded in 1859 and is based in Montreal, Canada.
VersaBank Company Profile (Get a rating)
VersaBank, a Schedule I chartered bank, offers various banking products and services in Canada. The Company offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts and tax-free savings accounts, as well as deposit insurance. It also provides lending services, including point-of-sale financing which involves the purchase of loans and leases from financial companies operating in various sectors; and commercial banking services including commercial real estate, public sector/infrastructure financing, condominium financing and residential mortgages. The company was previously known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.
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