Franklin Financial Network (FSB) and Webster Financial Corporation (WBS) Head to Head Analysis

Franklin Financial Network (NYSE: FSB) and Webster Financial Corporation (NYSE:WBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Earnings & Valuation

This table compares Franklin Financial Network and Webster Financial Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Franklin Financial Network $100.84 million 4.72 $32.30 million $2.45 14.73
Webster Financial Corporation $976.03 million 5.25 $232.95 million $2.53 22.02

Webster Financial Corporation has higher revenue and earnings than Franklin Financial Network. Franklin Financial Network is trading at a lower price-to-earnings ratio than Webster Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Webster Financial Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.9%. Franklin Financial Network does not pay a dividend. Webster Financial Corporation pays out 41.1% of its earnings in the form of a dividend. Webster Financial Corporation has raised its dividend for 6 consecutive years.

Institutional & Insider Ownership

59.2% of Franklin Financial Network shares are owned by institutional investors. Comparatively, 92.8% of Webster Financial Corporation shares are owned by institutional investors. 12.4% of Franklin Financial Network shares are owned by company insiders. Comparatively, 2.2% of Webster Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Franklin Financial Network and Webster Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Financial Network 23.70% 11.71% 1.00%
Webster Financial Corporation 21.09% 9.89% 0.93%

Analyst Ratings

This is a breakdown of current ratings and price targets for Franklin Financial Network and Webster Financial Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Financial Network 0 4 1 0 2.20
Webster Financial Corporation 1 6 2 0 2.11

Franklin Financial Network currently has a consensus target price of $40.20, indicating a potential upside of 11.36%. Webster Financial Corporation has a consensus target price of $53.63, indicating a potential downside of 3.73%. Given Franklin Financial Network’s stronger consensus rating and higher possible upside, research analysts plainly believe Franklin Financial Network is more favorable than Webster Financial Corporation.

Volatility & Risk

Franklin Financial Network has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, Webster Financial Corporation has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Summary

Webster Financial Corporation beats Franklin Financial Network on 9 of the 17 factors compared between the two stocks.

About Franklin Financial Network

Franklin Financial Network, Inc. is a financial holding company. Through its bank subsidiary, Franklin Synergy Bank (the Bank), a commercial bank, the Company provides a range of banking and related financial services. The Company focuses on the provision of services to small businesses, corporate entities, local governments and individuals. As of December 31, 2016, the Company operated through 12 branches in Williamson and Rutherford counties and a loan production office within the Nashville metropolitan area. The Company’s loan portfolio consists of real estate loans, including construction and land development loans, commercial loans and residential loans; commercial and industrial, and consumer and other loans. The Company’s investment securities portfolio consists of both securities classified as available-for-sale and securities classified as held-to-maturity. The Company’s primary sources of funds include deposits.

About Webster Financial Corporation

Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.

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