Webster Financial (NYSE:WBS) vs. BCB Bancorp, Inc. (NJ) (NASDAQ:BCBP) Critical Analysis

Webster Financial (NYSE:WBS) and BCB Bancorp, Inc. (NJ) (NASDAQ:BCBP) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Earnings & Valuation

This table compares Webster Financial and BCB Bancorp, Inc. (NJ)”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Webster Financial	$4.18 billion	2.48	$768.71 million	$5.37	11.99
BCB Bancorp, Inc. (NJ)	$196.95 million	0.72	$18.62 million	$0.05	165.40

Webster Financial has higher revenue and earnings than BCB Bancorp, Inc. (NJ). Webster Financial is trading at a lower price-to-earnings ratio than BCB Bancorp, Inc. (NJ), indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Webster Financial has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, BCB Bancorp, Inc. (NJ) has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Dividends

Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. BCB Bancorp, Inc. (NJ) pays an annual dividend of $0.64 per share and has a dividend yield of 7.7%. Webster Financial pays out 29.8% of its earnings in the form of a dividend. BCB Bancorp, Inc. (NJ) pays out 1,280.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Webster Financial and BCB Bancorp, Inc. (NJ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Webster Financial	21.32%	11.07%	1.23%
BCB Bancorp, Inc. (NJ)	1.50%	0.95%	0.08%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Webster Financial and BCB Bancorp, Inc. (NJ), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Webster Financial	1	1	14	0	2.81
BCB Bancorp, Inc. (NJ)	1	3	0	0	1.75

Webster Financial presently has a consensus target price of $70.92, suggesting a potential upside of 10.20%. BCB Bancorp, Inc. (NJ) has a consensus target price of $9.25, suggesting a potential upside of 11.85%. Given BCB Bancorp, Inc. (NJ)’s higher possible upside, analysts plainly believe BCB Bancorp, Inc. (NJ) is more favorable than Webster Financial.

Institutional & Insider Ownership

85.6% of Webster Financial shares are owned by institutional investors. Comparatively, 36.0% of BCB Bancorp, Inc. (NJ) shares are owned by institutional investors. 0.5% of Webster Financial shares are owned by company insiders. Comparatively, 13.9% of BCB Bancorp, Inc. (NJ) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Webster Financial beats BCB Bancorp, Inc. (NJ) on 12 of the 16 factors compared between the two stocks.

About Webster Financial

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of financial products and services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Consumer Banking. The Commercial Banking segment offers commercial real estate and equipment financing, business banking, asset-based lending, and commercial services; public sector finance; mortgage warehouse financing; sponsor and specialty financing services; credit, deposit, and cash flow management services; and wealth management solutions to business owners and operators, including trust, asset management, financial planning, insurance, retirement, and investment products, as well as treasury management services comprising derivative, treasury, accounts payable, accounts receivable, and trade products and services. This segment also provides commercial services, such as accounts receivable factoring and trade financing, payroll funding, and business process outsourcing. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefit services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. The Consumer Banking segment provides consumer deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers; and small business banking products, such as credit, deposit, and cash flow management products to businesses and professional service firms. The company offers online and mobile banking services. Webster Financial Corporation was founded in 1935 and is headquartered in Stamford, Connecticut.

About BCB Bancorp, Inc. (NJ)

BCB Bancorp, Inc. operates as a bank holding company for BCB Community Bank that engages in the provision of banking products and services to businesses and individuals in the United States. The company offers insured deposit products, including savings and club accounts, interest and non-interest-bearing demand accounts, money market accounts, certificates of deposit, and individual retirement accounts. It also provides various loan products, such as commercial and multi-family real estate loans, one-to-four family mortgage loans, commercial business loans, construction loans, home equity loans, and consumer loans. In addition, the company offers retail and commercial banking services comprising wire transfer, money order, safe deposit box, night depository, debit card, online and mobile banking, fraud detection, and automated teller services. The company was founded in 2000 and is based in Bayonne, New Jersey.