Peapack-Gladstone Financial (NASDAQ:PGC) and Bank of Montreal (NYSE:BMO) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Volatility & Risk

Peapack-Gladstone Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Bank of Montreal has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Dividends

Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Bank of Montreal pays an annual dividend of $2.95 per share and has a dividend yield of 3.7%. Peapack-Gladstone Financial pays out 10.3% of its earnings in the form of a dividend. Bank of Montreal pays out 47.3% 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 recent ratings and recommmendations for Peapack-Gladstone Financial and Bank of Montreal, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peapack-Gladstone Financial 0 0 3 0 3.00
Bank of Montreal 0 0 5 0 3.00

Peapack-Gladstone Financial currently has a consensus price target of $38.75, indicating a potential upside of 32.16%. Bank of Montreal has a consensus price target of $104.50, indicating a potential upside of 32.41%. Given Bank of Montreal’s higher probable upside, analysts plainly believe Bank of Montreal is more favorable than Peapack-Gladstone Financial.

Earnings and Valuation

This table compares Peapack-Gladstone Financial and Bank of Montreal’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peapack-Gladstone Financial $173.35 million 3.22 $36.49 million $1.94 15.11
Bank of Montreal $21.48 billion 2.35 $4.09 billion $6.24 12.65

Bank of Montreal has higher revenue and earnings than Peapack-Gladstone Financial. Bank of Montreal is trading at a lower price-to-earnings ratio than Peapack-Gladstone Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Peapack-Gladstone Financial and Bank of Montreal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peapack-Gladstone Financial 22.54% 10.15% 0.98%
Bank of Montreal 16.17% 14.75% 0.79%

Institutional and Insider Ownership

72.1% of Peapack-Gladstone Financial shares are owned by institutional investors. Comparatively, 43.1% of Bank of Montreal shares are owned by institutional investors. 4.8% of Peapack-Gladstone Financial shares are owned by insiders. Comparatively, 1.0% of Bank of Montreal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Bank of Montreal beats Peapack-Gladstone Financial on 8 of the 15 factors compared between the two stocks.

About Peapack-Gladstone Financial

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Private Wealth Management. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential and commercial mortgage, home equity lines of credit, and other second mortgage loans, as well as construction loans. In addition, it offers asset management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; corporate trust services comprising services as trustee for pension and profit sharing plans; and other financial planning and advisory services. Further, the company operates automated teller machines at 20 locations; and provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; and wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and wealth management branches in Somerset, Morris, Hunterdon, and Union counties. Peapack-Gladstone Financial Corporation was founded in 1921 and is based in Bedminster, New Jersey.

About Bank of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through three groups: Personal and Commercial Banking, Wealth Management, and BMO Capital Markets. The company's personal banking products and services include checking and savings accounts, credit cards, mortgages, creditor insurance products, and financial and investment advice services; and commercial banking products and services comprise business deposit accounts, commercial credit cards, business loans and commercial mortgages, cash management solutions, foreign exchange, and specialized banking programs for small business and commercial banking customers. It also offers equity and debt underwriting, corporate lending and project financing, mergers and acquisitions advisory services, securitization, treasury management, risk management, debt and equity research, and institutional sales and trading services to corporate, institutional, and government clients. In addition, the company offers trade finance, investment management, online investing, trust and estate services, tax planning, and investment solutions to institutional investors, as well as industry-leading research, sales, and trading services. It operates approximately 1,500 branches in Canada and the United States, as well as 2 smart branches in Edmonton and Calgary, Alberta. The company was founded in 1817 and is headquartered in Montreal, Canada.

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