Financial Analysis: CapitalSource (CSE) vs. Bank Mutual (BKMU)
Bank Mutual (NASDAQ: BKMU) and CapitalSource (NYSE:CSE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
This table compares Bank Mutual and CapitalSource’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
54.7% of Bank Mutual shares are held by institutional investors. 10.0% of Bank Mutual shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Bank Mutual and CapitalSource’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Bank Mutual||$109.99 million||4.39||$16.95 million||$0.34||30.88|
Bank Mutual has higher revenue and earnings than CapitalSource.
Bank Mutual pays an annual dividend of $0.22 per share and has a dividend yield of 2.1%. CapitalSource does not pay a dividend. Bank Mutual pays out 64.7% of its earnings in the form of a dividend.
This is a summary of current ratings and price targets for Bank Mutual and CapitalSource, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Bank Mutual presently has a consensus target price of $10.75, indicating a potential upside of 2.38%.
Bank Mutual beats CapitalSource on 7 of the 8 factors compared between the two stocks.
About Bank Mutual
Bank Mutual Corporation is a savings and loan holding company. The Company owns Bank Mutual (the Bank), a federally-chartered savings bank. The Bank is engaged in the business of community banking, which includes attracting deposits from and making loans to the general public and private businesses, as well as governmental and non-profit entities. In addition to deposits, the Bank obtains funds through borrowings from the Federal Home Loan Bank (FHLB) of Chicago. These funding sources are used to originate loans, including commercial and industrial loans, multi-family residential loans, non-residential commercial real estate loans, one- to four-family loans, home equity loans and other consumer loans. The Bank also purchases and/or participates in loans from third-party financial institutions and is a seller of residential loans in the secondary market. It also invests in mortgage-related and other investment securities.
CapitalSource Inc. (CapitalSource) is a commercial lender, which provides financial products to small and middle market businesses nationwide and provides depository products and services to consumers in southern and central California, through its wholly owned subsidiary, CapitalSource Bank. As of December 31, 2012, it had 21 retail bank branches located in southern and central California. During the year ended December 31, 2012, it operated as two reportable segments: CapitalSource Bank and Other Commercial Finance. Its CapitalSource Bank segment comprises its commercial lending and banking business activities, and its Other Commercial Finance segment comprises its loan portfolio and other business activities in the Parent Company. In April 2014, PacWest Bancorp merged with CapitalSource Inc.
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