Critical Survey: Stellarone (STEL) vs. Its Rivals

Stellarone (NYSE:STEL) is one of 6,828 publicly-traded companies in the “” industry, but how does it contrast to its peers? We will compare Stellarone to similar companies based on the strength of its dividends, analyst recommendations, risk, profitability, institutional ownership, earnings and valuation.

Volatility and Risk

Stellarone has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Stellarone’s peers have a beta of 11.83, meaning that their average stock price is 1,083% more volatile than the S&P 500.

Profitability

This table compares Stellarone and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stellarone	17.25%	6.30%	0.97%
Stellarone Competitors	-313.91%	-44.14%	-7.64%

Dividends

Stellarone pays an annual dividend of $0.60 per share and has a dividend yield of 1.6%. Stellarone pays out 30.3% of its earnings in the form of a dividend. As a group, “” companies pay a dividend yield of 5.2% and pay out 15.7% of their earnings in the form of a dividend. Stellarone has increased its dividend for 1 consecutive years. Stellarone lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Ratings

This is a breakdown of recent ratings for Stellarone and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stellarone	0	2	2	0	2.50
Stellarone Competitors	1727	5137	6539	341	2.40

Stellarone currently has a consensus target price of $37.00, indicating a potential downside of 1.04%. As a group, “” companies have a potential upside of 24.11%. Given Stellarone’s peers higher probable upside, analysts clearly believe Stellarone has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Stellarone and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Stellarone	$596.26 million	$102.87 million	18.88
Stellarone Competitors	$2.68 billion	-$26.10 million	-479.81

Stellarone’s peers have higher revenue, but lower earnings than Stellarone. Stellarone is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

54.2% of Stellarone shares are held by institutional investors. Comparatively, 35.5% of shares of all “” companies are held by institutional investors. 9.3% of Stellarone shares are held by company insiders. Comparatively, 17.2% of shares of all “” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Stellarone beats its peers on 8 of the 15 factors compared.

About Stellarone

StellarOne Corporation is a bank holding company of StellarOne Bank (the Bank). The Bank is an independent commercial bank holding company. It offers services provided by full-service banks, including individual and commercial demand and time deposit accounts, commercial and consumer loans, residential mortgages, credit card services and deposit services. The Bank, through its commercial banking segment, offers Internet banking access for banking services, mobile banking and online bill payment for both consumers and commercial customers. Lending is focused on individuals and small to middle-market businesses in the local markets of the Bank. The Bank, through its wealth management segment, provides a variety of wealth management and personal trust services. The mortgage banking segment engages primarily in the origination and acquisition of residential mortgages for sale into the secondary market. In January 2014, Union First Market Bankshares Corp acquired StellarOne Corporation.