Walter Investment Management Corp. (NYSE: WAC) and BankUnited (NYSE:BKU) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Institutional & Insider Ownership

56.5% of Walter Investment Management Corp. shares are held by institutional investors. Comparatively, 98.2% of BankUnited shares are held by institutional investors. 46.6% of Walter Investment Management Corp. shares are held by insiders. Comparatively, 5.1% of BankUnited shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Walter Investment Management Corp. and BankUnited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Walter Investment Management Corp. $947.12 million 0.02 -$217.78 million ($5.96) -0.09
BankUnited $973.23 million 3.74 $238.16 million $2.23 15.30

BankUnited has higher revenue and earnings than Walter Investment Management Corp.. Walter Investment Management Corp. is trading at a lower price-to-earnings ratio than BankUnited, indicating that it is currently the more affordable of the two stocks.

Dividends

BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. Walter Investment Management Corp. does not pay a dividend. BankUnited pays out 37.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Walter Investment Management Corp. and BankUnited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walter Investment Management Corp. 1 1 0 0 1.50
BankUnited 0 3 7 0 2.70

Walter Investment Management Corp. currently has a consensus target price of $1.13, suggesting a potential upside of 114.29%. BankUnited has a consensus target price of $40.82, suggesting a potential upside of 19.63%. Given Walter Investment Management Corp.’s higher probable upside, research analysts plainly believe Walter Investment Management Corp. is more favorable than BankUnited.

Profitability

This table compares Walter Investment Management Corp. and BankUnited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walter Investment Management Corp. -18.10% -796.24% -0.52%
BankUnited 19.54% 9.81% 0.87%

Volatility and Risk

Walter Investment Management Corp. has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, BankUnited has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Summary

BankUnited beats Walter Investment Management Corp. on 12 of the 15 factors compared between the two stocks.

About Walter Investment Management Corp.

Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.

About BankUnited

BankUnited, Inc. is the bank holding company of BankUnited (the Bank). The bank is a national banking association. As of December 31, 2016, the Bank provided a range of banking services to individual and corporate customers through 94 banking centers located in 15 Florida counties and six banking centers in the New York metropolitan area. The Bank also provides a range of traditional banking products and services to both its commercial and retail customers. The Company offers a range of lending products, including small business loans, commercial real estate loans, equipment loans and leases, term loans, formula-based loans, municipal and non-profit loans and leases, commercial and mortgage warehouse lines of credit, letters of credit and consumer loans. It offers traditional deposit products, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of terms and rates.

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