Analyzing Westpac Banking (OTCMKTS:WEBNF) & Home Capital Group (OTCMKTS:HMCBF)

Westpac Banking (OTCMKTS:WEBNF – Get Rating) and Home Capital Group (OTCMKTS:HMCBF – Get Rating) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Valuation and Earnings

This table compares Westpac Banking and Home Capital Group’s revenue, earnings per share (EPS) and valuation.

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Westpac Banking is trading at a lower price-to-earnings ratio than Home Capital Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Westpac Banking and Home Capital Group, as reported by MarketBeat.com.

Home Capital Group has a consensus price target of $40.83, suggesting a potential upside of 39.17%. Given Home Capital Group’s higher possible upside, analysts plainly believe Home Capital Group is more favorable than Westpac Banking.

Profitability

This table compares Westpac Banking and Home Capital Group’s net margins, return on equity and return on assets.

Insider and Institutional Ownership

13.9% of Westpac Banking shares are held by institutional investors. Comparatively, 37.0% of Home Capital Group shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Westpac Banking pays an annual dividend of C$1.78 per share and has a dividend yield of 12.8%. Home Capital Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.2%. Westpac Banking pays out 74.6% of its earnings in the form of a dividend. Home Capital Group pays out 15.7% 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.

Summary

Home Capital Group beats Westpac Banking on 6 of the 9 factors compared between the two stocks.

About Westpac Banking

(Get Rating)

Westpac Banking Corp. engages in the provision of banking and financial services. It operates through the following segments: Consumer, Business, Westpac Institutional Bank, Westpac New Zealand, Specialist and Group. The Consumer segment provides banking products, including mortgages, credit cards, personal loans, and savings and deposit products. The Business segment serves the banking needs of SME and commercial customers, including agribusiness and provides banking and advisory services to high net worth individuals through private wealth. The Westpac Institutional Bank segment provides a broad range of financial products and services to corporate, institutional and government customers. The Westpac New Zealand segment provides banking, wealth and insurance products and services for consumer, business and institutional customers in New Zealand. The Specialist segment comprises the operations that Westpac ultimately plans to exit with agreements in place for the sale of Westpac Life Insurance and motor vehicle dealer finance and notated leasing businesses. The Group segment includes the results of unallocated support functions such as treasury, chief operating office and core sup

About Home Capital Group

(Get Rating)

Home Capital Group, Inc. operates as an investment holding company with interests in providing loan and trust services. It offers deposits, residential and non-residential commercial mortgage lending, consumer lending and credit card services. The company was founded on September 28, 1977 and is headquartered in Toronto, Canada.

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