Deutsche Bank (NYSE: DB) and BankUnited (NYSE:BKU) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Earnings and Valuation

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This table compares Deutsche Bank and BankUnited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deutsche Bank $43.11 billion 0.71 -$1.55 billion ($0.50) -29.58
BankUnited $1.36 billion 3.32 $614.27 million $5.58 7.63

BankUnited has lower revenue, but higher earnings than Deutsche Bank. Deutsche Bank is trading at a lower price-to-earnings ratio than BankUnited, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

25.0% of Deutsche Bank shares are held by institutional investors. Comparatively, 97.0% of BankUnited shares are held by institutional investors. 2.9% of BankUnited shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Deutsche Bank pays an annual dividend of $0.21 per share and has a dividend yield of 1.4%. BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Deutsche Bank pays out -42.0% of its earnings in the form of a dividend. BankUnited pays out 15.1% 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Deutsche Bank and BankUnited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deutsche Bank 3 6 1 0 1.80
BankUnited 1 4 6 0 2.45

Deutsche Bank currently has a consensus target price of $18.03, indicating a potential upside of 21.91%. BankUnited has a consensus target price of $42.60, indicating a potential upside of 0.00%. Given Deutsche Bank’s higher probable upside, equities research analysts clearly believe Deutsche Bank is more favorable than BankUnited.

Risk and Volatility

Deutsche Bank has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, BankUnited has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares Deutsche Bank and BankUnited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deutsche Bank -2.34% -1.28% -0.06%
BankUnited 45.09% 10.83% 1.00%

Summary

BankUnited beats Deutsche Bank on 12 of the 16 factors compared between the two stocks.

About Deutsche Bank

Deutsche Bank AG is a bank and holding company for its subsidiaries. The Company offers a range of investment, financial and related products and services to private individuals, corporate entities and institutional clients. It operates through six divisions: Global Markets, which offers financial products, including trading and hedging services to institutions and corporate clients; Corporate & Investment Banking, which brings together its commercial banking, corporate finance and transaction banking capability; Private, Wealth and Commercial Clients, which combines its capability in private and commercial banking, as well as in wealth management solutions; Deutsche Asset Management, whose investment capabilities span both active and passive strategies and an array of asset classes, including equities, fixed income, real estate and sustainable investments; Postbank, which is a German financial service provider for retail, business and corporate clients, and Non-Core Operations Unit.

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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