Analyzing Beacon Financial (NYSE:BBT) & Eastern Bankshares (NASDAQ:EBC)

Beacon Financial (NYSE:BBT) and Eastern Bankshares (NASDAQ:EBC) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

83.1% of Beacon Financial shares are owned by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are owned by institutional investors. 1.1% of Beacon Financial shares are owned by insiders. Comparatively, 1.3% of Eastern Bankshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Beacon Financial and Eastern Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beacon Financial	$882.68 million	2.61	$90.27 million	$1.32	20.84
Eastern Bankshares	$1.33 billion	3.67	$88.22 million	$1.76	12.11

Beacon Financial has higher earnings, but lower revenue than Eastern Bankshares. Eastern Bankshares is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Beacon Financial and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Beacon Financial	8.96%	9.15%	1.01%
Eastern Bankshares	25.12%	8.71%	1.24%

Risk & Volatility

Beacon Financial has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Dividends

Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.7%. Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastern Bankshares pays out 34.1% of its earnings in the form of a dividend. Eastern Bankshares has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Beacon Financial and Eastern Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beacon Financial	0	4	3	0	2.43
Eastern Bankshares	0	3	6	0	2.67

Beacon Financial presently has a consensus price target of $32.50, suggesting a potential upside of 18.14%. Eastern Bankshares has a consensus price target of $24.86, suggesting a potential upside of 16.62%. Given Beacon Financial’s higher probable upside, equities research analysts clearly believe Beacon Financial is more favorable than Eastern Bankshares.

Summary

Eastern Bankshares beats Beacon Financial on 11 of the 17 factors compared between the two stocks.

About Beacon Financial

Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.