Head-To-Head Review: Bank of N.T. Butterfield & Son (NYSE:NTB) versus Westpac Banking (NYSE:WBK)

Bank of N.T. Butterfield & Son (NYSE:NTB) and Westpac Banking (NYSE:WBK) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Bank of N.T. Butterfield & Son and Westpac Banking, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of N.T. Butterfield & Son 0 2 2 0 2.50
Westpac Banking 2 4 1 0 1.86

Bank of N.T. Butterfield & Son currently has a consensus target price of $44.00, suggesting a potential upside of 56.36%. Given Bank of N.T. Butterfield & Son’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than Westpac Banking.

Valuation & Earnings

This table compares Bank of N.T. Butterfield & Son and Westpac Banking’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of N.T. Butterfield & Son $517.80 million 2.97 $195.18 million $3.53 7.97
Westpac Banking $28.76 billion 2.30 $6.16 billion $1.74 11.06

Westpac Banking has higher revenue and earnings than Bank of N.T. Butterfield & Son. Bank of N.T. Butterfield & Son is trading at a lower price-to-earnings ratio than Westpac Banking, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

71.8% of Bank of N.T. Butterfield & Son shares are held by institutional investors. Comparatively, 0.5% of Westpac Banking shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Bank of N.T. Butterfield & Son and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of N.T. Butterfield & Son 34.60% 22.69% 1.84%
Westpac Banking N/A N/A N/A

Risk and Volatility

Bank of N.T. Butterfield & Son has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Dividends

Westpac Banking pays an annual dividend of $1.29 per share and has a dividend yield of 6.7%. Bank of N.T. Butterfield & Son does not pay a dividend. Westpac Banking pays out 74.1% of its earnings in the form of a dividend. Westpac Banking has raised its dividend for 2 consecutive years.

Summary

Bank of N.T. Butterfield & Son beats Westpac Banking on 11 of the 16 factors compared between the two stocks.

Bank of N.T. Butterfield & Son Company Profile

The Bank of N.T. Butterfield & Son Limited provides a range of community, commercial, and private banking services to individuals and small to medium-sized businesses. It accepts retail and corporate checking, savings, term, and non-interest bearing deposits, as well as certificates of deposit. The company's lending portfolio includes residential mortgage lending, automobile financing, consumer financing, credit cards, overdraft facilities, commercial real estate lending, and commercial and industrial loans. It also offers investment products and services; and cash and liquidity management, foreign exchange, custody administration, and settlement services. In addition, the company provides personal and property/auto insurance products; letters of credit; and cash management, payroll, remote banking, money market, advisory, brokerage, trust, estate, company management, private banking, administered banking services, and fiduciary services. Further, it offers debit cards; automated teller machines; personal and business deposit, merchant acquiring, and mobile/online banking services. The company operates through offices in the Cayman Islands, Guernsey, Jersey, the United Kingdom, The Bahamas, Switzerland, Singapore, Mauritius, and Canada, as well as through four branch locations in Bermuda and three branch locations in the Cayman Islands. The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda.

Westpac Banking Company Profile

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business one, community solutions one, not-for-profit savings, and foreign currency accounts; term and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, insurance premium, corporate and structured finance, and trade and supply chain financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; instalment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

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