Mizuho Financial Group (NYSE:MFG) and VersaBank (NASDAQ:VBNK) Financial Comparison

VersaBank (NASDAQ:VBNK) and Mizuho Financial Group (NYSE:MFG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for VersaBank and Mizuho Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VersaBank	0	4	1	0	2.20
Mizuho Financial Group	0	1	1	0	2.50

VersaBank currently has a consensus target price of $11.27, indicating a potential downside of 3.37%. Given VersaBank’s higher probable upside, analysts clearly believe VersaBank is more favorable than Mizuho Financial Group.

Dividends

VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.6%. Mizuho Financial Group pays an annual dividend of $0.15 per share and has a dividend yield of 2.2%. VersaBank pays out 10.3% of its earnings in the form of a dividend. Mizuho Financial Group pays out 31.3% 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.

Earnings and Valuation

This table compares VersaBank and Mizuho Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VersaBank	$216.31 million	1.73	$29.20 million	$0.68	17.15
Mizuho Financial Group	$3,610.35 billion	0.02	$3.92 billion	$0.48	14.18

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

Risk and Volatility

VersaBank has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Mizuho Financial Group has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Profitability

This table compares VersaBank and Mizuho Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VersaBank	9.56%	7.47%	0.72%
Mizuho Financial Group	10.16%	8.48%	0.32%

Insider & Institutional Ownership

56.9% of VersaBank shares are owned by institutional investors. Comparatively, 3.3% of Mizuho Financial Group shares are owned by institutional investors. 5.3% of VersaBank shares are owned by insiders. Comparatively, 0.0% of Mizuho Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

VersaBank beats Mizuho Financial Group on 9 of the 15 factors compared between the two stocks.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.

About Mizuho Financial Group

Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally. It operates through Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, Asset Management Company, and Others segments. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers fund management, underwriting of equity and bonds, risk hedging products, etc. for corporate customers; solutions based on capital management, business strategy, and financial strategy; real estate services; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers corporate finance and transaction banking srvices; sales and trading services; investment products; pension funds; and ALM and investment services, including stable capital raising and balance sheet management, as well as management of fixed income, equity, and other securities portfolios. Additionally, the company provides online banking, cash management solutions, currency transaction, trade finance, custody, yen correspondence settlement, and research and consulting services; trust, securitization and structured finance, and stock transfers; and private banking and information technology-related services. Mizuho Financial Group, Inc. was founded in 2000 and is headquartered in Tokyo, Japan.