Critical Contrast: Fulton Financial (FULT) versus CPB (CPF)

Fulton Financial (NASDAQ: FULT) and CPB (NYSE:CPF) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Valuation & Earnings

This table compares Fulton Financial and CPB’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fulton Financial $793.28 million 4.15 $161.62 million $1.03 18.25
CPB $209.46 million 4.61 $46.99 million $1.59 20.14

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

Insider and Institutional Ownership

62.7% of Fulton Financial shares are owned by institutional investors. Comparatively, 92.3% of CPB shares are owned by institutional investors. 0.7% of Fulton Financial shares are owned by insiders. Comparatively, 4.1% of CPB shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Fulton Financial and CPB’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fulton Financial 21.15% 8.28% 0.92%
CPB 22.45% 9.64% 0.90%

Analyst Ratings

This is a summary of current ratings for Fulton Financial and CPB, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fulton Financial 1 5 0 0 1.83
CPB 0 2 1 0 2.33

Fulton Financial presently has a consensus target price of $18.25, indicating a potential downside of 2.93%. CPB has a consensus target price of $32.50, indicating a potential upside of 1.50%. Given CPB’s stronger consensus rating and higher possible upside, analysts clearly believe CPB is more favorable than Fulton Financial.

Dividends

Fulton Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.3%. CPB pays an annual dividend of $0.72 per share and has a dividend yield of 2.2%. Fulton Financial pays out 42.7% of its earnings in the form of a dividend. CPB pays out 45.3% 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. Fulton Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Fulton Financial has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, CPB has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Summary

CPB beats Fulton Financial on 11 of the 16 factors compared between the two stocks.

Fulton Financial Company Profile

Fulton Financial Corporation is a financial holding company. The Company is the bank holding company of Fulton Bank N.A. (the Bank). As of December 31, 2016, the Company’s six subsidiary banks were located primarily in suburban or semi-rural geographic markets throughout a five-state region (Pennsylvania, Delaware, Maryland, New Jersey and Virginia). Each of the Company’s subsidiary banks offers a range of consumer and commercial banking products and services in its local market area. Personal banking services include various checking account and savings deposit products, certificates of deposit and individual retirement accounts. The subsidiary banks offer a range of consumer lending products to creditworthy customers in their market areas. Commercial banking services are provided to small and medium sized businesses. It also offers investment management, trust, brokerage, insurance and investment advisory services to consumer and commercial banking customers in its market areas.

CPB Company Profile

Central Pacific Financial Corp. is the bank holding company of Central Pacific Bank (the Bank). The Company’s segments include Banking Operations, Treasury and All Others. The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending, consumer lending, trust services, retail brokerage services and its retail branch offices, which provide a range of deposit and loan products, as well as various other banking services. The Treasury segment is responsible for managing the Company’s investment securities portfolio and wholesale funding activities. The All Others segment includes activities, such as electronic banking, data processing and management of Bank-owned properties. The Company also offers wealth management products and services, such as non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services.

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