Analyzing Veritex (VBTX) and Associated Banc (ASB)

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Veritex (NYSE: ASB) and Associated Banc (NYSE:ASB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Profitability

This table compares Veritex and Associated Banc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veritex 23.09% 6.53% 1.09%
Associated Banc 20.00% 9.10% 0.95%

Volatility & Risk

Veritex has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, Associated Banc has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Insider & Institutional Ownership

75.6% of Veritex shares are held by institutional investors. Comparatively, 73.7% of Associated Banc shares are held by institutional investors. 4.7% of Veritex shares are held by company insiders. Comparatively, 2.1% of Associated Banc shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Associated Banc pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Veritex does not pay a dividend. Associated Banc pays out 39.5% of its earnings in the form of a dividend. Associated Banc has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for Veritex and Associated Banc, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veritex 0 0 3 0 3.00
Associated Banc 0 8 2 0 2.20

Veritex presently has a consensus target price of $35.00, suggesting a potential upside of 13.38%. Associated Banc has a consensus target price of $27.78, suggesting a potential upside of 0.28%. Given Veritex’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Veritex is more favorable than Associated Banc.

Valuation and Earnings

This table compares Veritex and Associated Banc’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veritex $87.13 million 8.57 $15.15 million $0.95 32.49
Associated Banc $1.22 billion 3.91 $229.26 million $1.52 18.22

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

Summary

Veritex beats Associated Banc on 11 of the 17 factors compared between the two stocks.

Veritex Company Profile

Veritex Holdings, Inc. operates as the holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company's deposit products include checking, demand, savings, money market, and time deposit accounts, as well as commercial deposit and financial institution money market accounts. Its loan portfolio consists of commercial real estate and general commercial loans, residential real estate loans, construction and land loans, farmland loans, and consumer loans. The company also provides a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as banking through telephone, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier's checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates through 20 branches and 1 mortgage office located in the Dallas-Fort Worth metroplex, as well as 1 branch in the Houston metropolitan area. Veritex Holdings, Inc. was founded in 2009 and is headquartered in Dallas, Texas.

Associated Banc Company Profile

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses primarily in Wisconsin, Illinois, and Minnesota. Its Corporate and Commercial Specialty segment offers deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; and lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending, and loan syndications. This segment also provides specialized financial services that comprise interest rate risk management, foreign exchange solutions, and commodity hedging. The company's Community, Consumer, and Business segment offers checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; savings, money market deposit accounts, IRA accounts, certificates of deposit, and fixed and variable annuities, as well as full-service, discount, and online investment brokerage; investment advisory services; trust and investment management accounts; and insurance and other related products and services. This segment also engages in the administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services. Its Risk Management and Shared Services segment provides corporate risk management, credit administration, finance, treasury, operations, and technology services. As of March 16, 2018, the company operated 270 banking locations serving approximately 110 communities. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

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