Analyzing Salisbury Bancorp (NASDAQ:SAL) and People’s United Financial (NASDAQ:PBCT)

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

Analyst Recommendations

This is a breakdown of current ratings for Salisbury Bancorp and People’s United Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salisbury Bancorp 0 0 1 0 3.00
People’s United Financial 0 3 0 0 2.00

People’s United Financial has a consensus target price of $18.50, suggesting a potential upside of 12.67%. Given People’s United Financial’s higher probable upside, analysts clearly believe People’s United Financial is more favorable than Salisbury Bancorp.

Institutional and Insider Ownership

8.1% of Salisbury Bancorp shares are owned by institutional investors. Comparatively, 75.8% of People’s United Financial shares are owned by institutional investors. 13.2% of Salisbury Bancorp shares are owned by insiders. Comparatively, 2.4% of People’s United Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Salisbury Bancorp has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Earnings and Valuation

This table compares Salisbury Bancorp and People’s United Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salisbury Bancorp $49.32 million 2.22 $8.82 million $3.01 12.94
People’s United Financial $1.92 billion 3.40 $468.10 million $1.31 12.53

People’s United Financial has higher revenue and earnings than Salisbury Bancorp. People’s United Financial is trading at a lower price-to-earnings ratio than Salisbury Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Salisbury Bancorp 19.01% 9.32% 0.87%
People’s United Financial 23.51% 8.21% 1.08%

Dividends

Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. People’s United Financial pays an annual dividend of $0.71 per share and has a dividend yield of 4.3%. Salisbury Bancorp pays out 37.2% of its earnings in the form of a dividend. People’s United Financial pays out 54.2% 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. 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.

Summary

People’s United Financial beats Salisbury Bancorp on 10 of the 17 factors compared between the two stocks.

About Salisbury Bancorp

Salisbury Bancorp, Inc. operates as the bank holding company for Salisbury Bank and Trust Company that provides commercial banking, consumer financing, retail banking, and trust and wealth advisory services. It offers various retail and commercial deposit products. The company also provides loans, such as residential and commercial real estate loans; construction loans; commercial loans; and consumer loans, including home equity loans and lines of credit, and auto and personal installment loans. In addition, it offers a range of fiduciary services, including trust and estate administration, wealth advisory, and investment management services to individuals, families, businesses, and institutions. Further, the company provides additional depositor related services consisting of landlord/tenant lease security accounts and services, merchant services, payroll services, ATM services, bank-by-phone services, Internet banking services, Internet bill pay services, person to person payments, bank to bank transfers, mobile banking services, and online financial management with account aggregation services, as well as cash management services, including remote deposit capture, ACH origination, wire transfers, and positive pay services. It operates through a network of 14 banking offices and 10 ATMs located in Litchfield County, Connecticut; Dutchess, Orange, and Ulster Counties, New York; and Berkshire County, Massachusetts. Salisbury Bancorp, Inc. was founded in 1848 and is headquartered in Lakeville, Connecticut.

About People’s United Financial

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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