Analyzing Regions Financial (NYSE:RF) and National Bank (NYSE:NBHC)

National Bank (NYSE:NBHC) and Regions Financial (NYSE:RF) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Dividends

National Bank pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. Regions Financial pays an annual dividend of $1.06 per share and has a dividend yield of 3.5%. National Bank pays out 43.5% of its earnings in the form of a dividend. Regions Financial pays out 46.3% 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. National Bank has raised its dividend for 10 consecutive years and Regions Financial has raised its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares National Bank and Regions Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$587.34 million	2.74	$109.57 million	$2.85	14.94
Regions Financial	$9.61 billion	2.74	$2.16 billion	$2.29	13.12

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
National Bank	18.66%	8.65%	1.17%
Regions Financial	22.44%	12.55%	1.37%

Insider and Institutional Ownership

92.7% of National Bank shares are owned by institutional investors. Comparatively, 79.4% of Regions Financial shares are owned by institutional investors. 2.9% of National Bank shares are owned by insiders. Comparatively, 0.3% of Regions Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

National Bank has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	3	3	0	2.50
Regions Financial	3	8	6	0	2.18

National Bank presently has a consensus target price of $45.25, indicating a potential upside of 6.30%. Regions Financial has a consensus target price of $29.84, indicating a potential downside of 0.70%. Given National Bank’s stronger consensus rating and higher probable upside, equities analysts plainly believe National Bank is more favorable than Regions Financial.

Summary

Regions Financial beats National Bank on 10 of the 17 factors compared between the two stocks.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.