Critical Contrast: Fulton Financial (NASDAQ:FULT) and Northwest Bancshares (NASDAQ:NWBI)

Northwest Bancshares (NASDAQ:NWBIGet Rating) and Fulton Financial (NASDAQ:FULTGet Rating) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Risk and Volatility

Northwest Bancshares has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Fulton Financial has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Insider and Institutional Ownership

64.6% of Northwest Bancshares shares are held by institutional investors. Comparatively, 64.8% of Fulton Financial shares are held by institutional investors. 1.0% of Northwest Bancshares shares are held by insiders. Comparatively, 1.0% of Fulton Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Northwest Bancshares and Fulton Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Bancshares 1 2 0 0 1.67
Fulton Financial 0 2 1 0 2.33

Northwest Bancshares currently has a consensus price target of $12.67, indicating a potential downside of 7.88%. Fulton Financial has a consensus price target of $18.20, indicating a potential upside of 13.40%. Given Fulton Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Fulton Financial is more favorable than Northwest Bancshares.

Earnings & Valuation

This table compares Northwest Bancshares and Fulton Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $561.40 million 3.11 $154.32 million $1.01 13.61
Fulton Financial $1.09 billion 2.46 $286.98 million $1.67 9.61

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

Dividends

Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 5.8%. Fulton Financial pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. Northwest Bancshares pays out 79.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fulton Financial pays out 35.9% of its earnings in the form of a dividend. Fulton Financial has raised its dividend for 2 consecutive years.

Profitability

This table compares Northwest Bancshares and Fulton Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Bancshares 24.18% 8.52% 0.91%
Fulton Financial 26.28% 12.66% 1.16%

Summary

Fulton Financial beats Northwest Bancshares on 13 of the 16 factors compared between the two stocks.

About Northwest Bancshares

(Get Rating)

Northwest Bancshares, Inc. operates as the holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans and loans collateralized by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts. The company also offers investment management and trust services. As of December 31, 2021, it operated 170 community-banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.

About Fulton Financial

(Get Rating)

Fulton Financial Corporation operates as a financial holding company that provides consumer and commercial banking products and services. It accepts various checking accounts and savings deposit products, certificates of deposit, and individual retirement accounts. The company also offers secured consumer loans, including home equity loans and lines of credit, automobile loans, personal lines of credit, and checking account overdraft protection; construction and jumbo residential mortgage loans; and commercial lending products comprising commercial real estate, commercial and industrial, and construction loans, as well as equipment lease financing loans. In addition, it provides letters of credit, cash management services, and traditional deposit products; and wealth management services, including investment management, trust, brokerage, insurance, and investment advisory services. Further, the company owns passive investments, as well as trust preferred securities; and sells various life insurance products. It provides its products and services through traditional financial center banking, as well as through a network of automated teller machines, telephone banking, mobile banking, and online banking. The company operated branches in Pennsylvania, Maryland, Delaware, New Jersey, and Virginia. Fulton Financial Corporation was incorporated in 1882 and is headquartered in Lancaster, Pennsylvania.

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