Reviewing SI Financial Group (NASDAQ:SIFI) and People’s United Financial (NASDAQ:PBCT)

SI Financial Group (NASDAQ:SIFI) and People’s United Financial (NASDAQ:PBCT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Risk & Volatility

SI Financial Group has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Profitability

This table compares SI Financial Group and People’s United Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SI Financial Group 14.91% 6.77% 0.71%
People’s United Financial 23.64% 8.16% 1.06%

Dividends

SI Financial Group pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. People’s United Financial pays an annual dividend of $0.71 per share and has a dividend yield of 4.3%. People’s United Financial pays out 54.2% of its earnings in the form of a dividend. SI Financial Group has increased its dividend for 3 consecutive years and People’s United Financial has increased its dividend for 12 consecutive years. People’s United Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for SI Financial Group and People’s United Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SI Financial Group 0 0 0 0 N/A
People’s United Financial 0 4 1 0 2.20

People’s United Financial has a consensus price target of $19.88, suggesting a potential upside of 20.67%. Given People’s United Financial’s higher probable upside, analysts clearly believe People’s United Financial is more favorable than SI Financial Group.

Institutional and Insider Ownership

61.2% of SI Financial Group shares are held by institutional investors. Comparatively, 75.8% of People’s United Financial shares are held by institutional investors. 1.7% of SI Financial Group shares are held by insiders. Comparatively, 2.4% of People’s United Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares SI Financial Group and People’s United Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SI Financial Group $69.41 million 2.58 $9.56 million N/A N/A
People’s United Financial $1.92 billion 3.41 $468.10 million $1.31 12.57

People’s United Financial has higher revenue and earnings than SI Financial Group.

Summary

People’s United Financial beats SI Financial Group on 13 of the 15 factors compared between the two stocks.

SI Financial Group Company Profile

SI Financial Group, Inc. operates as the holding company for Savings Institute Bank and Trust Company that provides various financial services to consumers and businesses. Its deposit products include noninterest-bearing demand accounts, such as checking accounts; and interest-bearing accounts, including NOW and money market accounts, regular savings accounts, and certificates of deposit. The company also provides one- to four-family residential mortgage, multi-family and commercial real estate, construction and land, commercial business, and consumer loans. In addition, it offers trust services, which include fiduciary, investment management, and retirement services to individuals, partnerships, corporations, and institutions; and life insurance products and annuities. The company operates 23 full-service offices throughout Windham, New London, Tolland, Hartford, and Middlesex counties in Connecticut, as well as Newport and Washington counties in Rhode Island. SI Financial Group, Inc. was founded in 1842 and is headquartered in Willimantic, Connecticut.

People’s United Financial Company Profile

People's United Financial, Inc. operates as the bank holding company for People's United Bank, National Association that provides commercial banking, retail banking, and wealth management services to individual, corporate, and municipal customers. The company operates in two segments, Commercial Banking and Retail Banking. The Commercial Banking segment offers commercial real estate lending, commercial and industrial lending, and commercial deposit gathering services. This segment also provides equipment financing; cash management, correspondent banking, and municipal banking services; and institutional trust, corporate trust, private banking, and commercial insurance services. The Retail Banking segment offers consumer lending, including residential mortgage and home equity lending; and consumer deposit gathering services. This segment also provides brokerage, financial advisory, investment management, life insurance, and non-institutional trust services. In addition, the company offers online banking, investment trading, and telephone banking services. It operates through a network of 422 branches in Connecticut, southeastern New York, Massachusetts, Vermont, Maine, and New Hampshire, as well as 607 ATMs. The company was founded in 1842 and is headquartered in Bridgeport, Connecticut.

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