Critical Comparison: NewtekOne (NASDAQ:NEWT) & Regions Financial (NYSE:RF)

NewtekOne (NASDAQ:NEWT – Get Rating) and Regions Financial (NYSE:RF – Get Rating) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for NewtekOne and Regions Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	3	1	0	2.25
Regions Financial	0	8	8	0	2.50

NewtekOne presently has a consensus price target of $15.50, suggesting a potential upside of 24.90%. Regions Financial has a consensus price target of $23.50, suggesting a potential upside of 34.83%. Given Regions Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Regions Financial is more favorable than NewtekOne.

Risk & Volatility

NewtekOne has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Dividends

NewtekOne pays an annual dividend of $0.72 per share and has a dividend yield of 5.8%. Regions Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. NewtekOne pays out 51.8% of its earnings in the form of a dividend. Regions Financial pays out 34.2% 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. Regions Financial has increased its dividend for 2 consecutive years.

Profitability

This table compares NewtekOne and Regions Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewtekOne	26.96%	13.60%	4.32%
Regions Financial	28.61%	16.60%	1.53%

Institutional & Insider Ownership

14.9% of NewtekOne shares are owned by institutional investors. Comparatively, 72.9% of Regions Financial shares are owned by institutional investors. 5.7% of NewtekOne shares are owned by insiders. Comparatively, 0.3% of Regions Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares NewtekOne and Regions Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$86.24 million	3.54	$32.31 million	$1.39	8.93
Regions Financial	$7.53 billion	2.17	$2.25 billion	$2.34	7.45

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

Summary

Regions Financial beats NewtekOne on 11 of the 17 factors compared between the two stocks.

About NewtekOne

(Get Rating)

NewtekOne, Inc. is a non-diversified closed-end management investment company engaged in the provision of business and financial solutions. It offers loans, payments, payroll and benefits, web solutions, insurance, and technology solutions. The company was founded by Barry Sloane in 1998 and is headquartered in Boca Raton, FL.

About Regions Financial

(Get Rating)

Regions Financial Corp. operates as a bank holding company. It provides traditional commercial, retail and mortgage banking services, as well as other financial services in the fields of investment banking, asset management, trust, mutual funds, securities brokerage, insurance and other financing. The firm operates through the following segments: Corporate Bank, Consumer Bank, Wealth Management, and Other. The Corporate Bank segment represents the commercial banking functions including commercial and industrial, commercial real estate and investor real estate lending. The Consumer Bank segment holds the branch network, including consumer banking products and services related to residential first mortgages, home equity lines and loans, small business loans, indirect loans, consumer credit cards and other consumer loans. The Wealth Management segment offers individuals, businesses, governmental institutions and non-profit entities a range of solutions to help protect, grow and transfer wealth. The Other segment includes the company’s treasury function, the securities portfolio, wholesale funding activities, interest rate risk management activities and other corporate functions that a