Analyzing TCF Financial (TCF) & U.S. Bancorp (USB)

TCF Financial (NYSE: USB) and U.S. Bancorp (NYSE:USB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Volatility & Risk

TCF Financial has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Valuation & Earnings

This table compares TCF Financial and U.S. Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TCF Financial $1.47 billion 2.93 $268.63 million $1.20 21.39
U.S. Bancorp $24.00 billion 3.61 $6.22 billion $3.42 15.55

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

Analyst Recommendations

This is a summary of current ratings and price targets for TCF Financial and U.S. Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCF Financial 1 10 4 0 2.20
U.S. Bancorp 3 9 8 0 2.25

TCF Financial presently has a consensus price target of $25.46, suggesting a potential downside of 0.81%. U.S. Bancorp has a consensus price target of $58.26, suggesting a potential upside of 9.58%. Given U.S. Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe U.S. Bancorp is more favorable than TCF Financial.

Profitability

This table compares TCF Financial and U.S. Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TCF Financial 19.04% 11.81% 1.21%
U.S. Bancorp 26.96% 14.66% 1.41%

Institutional and Insider Ownership

85.9% of TCF Financial shares are held by institutional investors. Comparatively, 74.1% of U.S. Bancorp shares are held by institutional investors. 2.3% of TCF Financial shares are held by insiders. Comparatively, 0.4% of U.S. Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

TCF Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. U.S. Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. TCF Financial pays out 50.0% of its earnings in the form of a dividend. U.S. Bancorp pays out 35.1% 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. U.S. Bancorp has raised its dividend for 7 consecutive years.

Summary

U.S. Bancorp beats TCF Financial on 12 of the 17 factors compared between the two stocks.

TCF Financial Company Profile

TCF Financial Corporation operates as the holding company for TCF National Bank that provides various financial products and services in the United States and Canada. It operates through Consumer Banking, Wholesale Banking, and Enterprise Services segments. The company offers checking, savings, and money market accounts; certificates of deposits; and individual retirement accounts. It also provides consumer loans; loans secured by personal property, as well as unsecured personal loans; commercial real estate products; lease and equipment financing products; inventory financing products; and residential, consumer, and small business lending products. In addition, the company offers treasury services, such as investment and borrowing portfolios, as well as manages capital, debt, and market risks. Further, it provides credit, debit, and prepaid cards; and check cashing and remittance services. As of December 31, 2017, the company had 320 branches consisting of 189 traditional branches, 128 supermarket branches, and 3 campus branches. TCF Financial Corporation was founded in 1923 and is headquartered in Wayzata, Minnesota.

U.S. Bancorp Company Profile

U.S. Bancorp, a financial services holding company, provides various financial services in the United States. The company operates through five segments: Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. It offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products, as well as credit card services, leasing financing, import/export trade, asset-backed lending, agricultural finance, and other products. The company also provides ancillary services, such as capital markets, treasury management, and receivable lock-box collection services to corporate customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, it offers investment and insurance products to its customers principally within its markets, as well as fund administration services to a range of mutual and other funds. Further, it provides corporate and purchasing card, and corporate trust services; and merchant processing services, as well as cash and investment management, ATM processing, mortgage banking, and brokerage and leasing services. The company offers its products and services through operating a network of 3,067 banking offices principally operating in the Midwest and West regions of the United States, and through online services and over mobile devices, as well as operates a network of 4,771 ATMs. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.

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