Umpqua (NASDAQ:UMPQ) and Charter Financial Corp (Maryland) (NASDAQ:CHFN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Risk and Volatility

Umpqua has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Charter Financial Corp (Maryland) has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Dividends

Umpqua pays an annual dividend of $0.84 per share and has a dividend yield of 4.3%. Charter Financial Corp (Maryland) pays an annual dividend of $0.34 per share and has a dividend yield of 1.4%. Umpqua pays out 78.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Charter Financial Corp (Maryland) pays out 35.8% of its earnings in the form of a dividend. Umpqua has raised its dividend for 7 consecutive years and Charter Financial Corp (Maryland) has raised its dividend for 2 consecutive years. Umpqua is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Umpqua and Charter Financial Corp (Maryland)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Umpqua 24.23% 7.74% 1.18%
Charter Financial Corp (Maryland) 19.70% 7.34% 0.98%

Earnings & Valuation

This table compares Umpqua and Charter Financial Corp (Maryland)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Umpqua $1.22 billion 3.55 $246.01 million $1.07 18.33
Charter Financial Corp (Maryland) $75.10 million 5.06 $14.43 million $0.95 26.22

Umpqua has higher revenue and earnings than Charter Financial Corp (Maryland). Umpqua is trading at a lower price-to-earnings ratio than Charter Financial Corp (Maryland), indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Umpqua and Charter Financial Corp (Maryland), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Umpqua 1 5 5 0 2.36
Charter Financial Corp (Maryland) 0 1 0 0 2.00

Umpqua currently has a consensus price target of $24.08, suggesting a potential upside of 22.81%. Charter Financial Corp (Maryland) has a consensus price target of $24.00, suggesting a potential downside of 3.65%. Given Umpqua’s stronger consensus rating and higher possible upside, research analysts plainly believe Umpqua is more favorable than Charter Financial Corp (Maryland).

Institutional and Insider Ownership

88.7% of Umpqua shares are held by institutional investors. Comparatively, 66.6% of Charter Financial Corp (Maryland) shares are held by institutional investors. 1.0% of Umpqua shares are held by insiders. Comparatively, 12.1% of Charter Financial Corp (Maryland) shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Umpqua beats Charter Financial Corp (Maryland) on 13 of the 17 factors compared between the two stocks.

About Umpqua

Umpqua Holdings Corporation, through its subsidiaries, provides commercial and retail banking, and retail brokerage services. It operates through four segments: Commercial Bank, Wealth Management, Retail Bank, and Home Lending. The company offers deposit products, including non-interest bearing checking, interest bearing checking and savings, and money market accounts, as well as certificates of deposit. It also provides loans for business and commercial customers, such as accounts receivable and inventory financing, multi-family and equipment loans, commercial equipment leases, international trade, real estate construction loans, permanent financing products, small business administration program financing, and residential mortgage loans, as well as capital markets and treasury management services. In addition, the company offers loan products for small businesses; commercial and industrial loans; residential real estate loans for the construction, purchase, and refinancing of residential owner-occupied and rental properties; and consumer loans comprising secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans. Further, it provides financial planning, trust, and investment services; broker dealer and investment advisory services; and technology-based services that include remote deposit capture, online banking, bill pay and treasury, mobile banking, voice response banking, automatic payroll deposit program, ATM, interactive product kiosks, and Website services. The company serves small businesses, middle market, and large commercial customers; individual investors; and high net worth individuals. As of December 31, 2017, it operated commercial banking centers in 333 locations in Oregon, Washington, California, Idaho, and Nevada. The company was founded in 1953 and is headquartered in Portland, Oregon.

About Charter Financial Corp (Maryland)

Charter Financial Corporation operates as the holding company for CharterBank, a federally-chartered savings bank that provides various banking products and services to individuals and businesses in the United States. The company's deposit products include checking, money market, regular savings, and term certificate accounts, as well as noninterest-bearing demand deposits. It also offers commercial real estate loans, one- to four-family residential mortgage loans, construction loans, and investment securities; and commercial business loans, home equity loans, and lines of credit, as well as other consumer loans, including loans on deposits, automobile loans, mobile home loans, and various other installment loans. In addition, the company provides various community banking services, such as online banking and bill payment services, mobile banking, online cash management, safe deposit box rentals, and debit and ATM card services. It operates through a network of 22 branch offices in Metro Atlanta, the I-85 corridor south to Auburn, Alabama, and the Florida Gulf Coast. The company was founded in 1954 and is based in West Point, Georgia.

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