Head to Head Comparison: Mitsubishi UFJ Financial Group (NYSE:MUFG) vs. Prosperity Bancshares (NYSE:PB)

Mitsubishi UFJ Financial Group (NYSE:MUFG) and Prosperity Bancshares (NYSE:PB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Mitsubishi UFJ Financial Group pays an annual dividend of $0.51 per share and has a dividend yield of 2.4%. Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.5%. Mitsubishi UFJ Financial Group pays out 33.3% of its earnings in the form of a dividend. Prosperity Bancshares pays out 41.6% 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. Prosperity Bancshares has raised its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Mitsubishi UFJ Financial Group and Prosperity Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi UFJ Financial Group	0	0	3	2	3.40
Prosperity Bancshares	2	6	6	0	2.29

Prosperity Bancshares has a consensus target price of $77.55, indicating a potential upside of 13.55%. Given Prosperity Bancshares’ higher possible upside, analysts clearly believe Prosperity Bancshares is more favorable than Mitsubishi UFJ Financial Group.

Risk and Volatility

Mitsubishi UFJ Financial Group has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Profitability

This table compares Mitsubishi UFJ Financial Group and Prosperity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mitsubishi UFJ Financial Group	17.63%	12.30%	0.66%
Prosperity Bancshares	29.95%	7.39%	1.43%

Earnings & Valuation

This table compares Mitsubishi UFJ Financial Group and Prosperity Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi UFJ Financial Group	$97.13 billion	2.62	$11.41 billion	$1.53	14.02
Prosperity Bancshares	$1.74 billion	3.96	$542.84 million	$5.77	11.84

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

Insider & Institutional Ownership

13.6% of Mitsubishi UFJ Financial Group shares are held by institutional investors. Comparatively, 80.7% of Prosperity Bancshares shares are held by institutional investors. 0.0% of Mitsubishi UFJ Financial Group shares are held by insiders. Comparatively, 4.0% of Prosperity Bancshares shares are held by 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

Prosperity Bancshares beats Mitsubishi UFJ Financial Group on 11 of the 18 factors compared between the two stocks.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. It operates through seven segments: Digital Service, Retail & Commercial Banking, Japanese Corporate & Investment Banking, Global Commercial Banking, Asset Management & Investor Services, Global Corporate & Investment Banking, and Global Markets. The company offers commercial banking, trust banking, and securities products and services to retail, and small and medium-sized enterprise customers. It also provides mergers and acquisition, debt and equity issuance, financial advice, and real estate-related services; digital-based financial services; credit cards; and trust banking and securities products and services, as well as engages in the lending, fund settlement, and foreign exchange businesses. In addition, the company offers corporate banking services, such as project export credit agency finance, and financing through asset-backed commercial paper; investment and transaction banking services for corporations, financial institutions, sovereign and multinational organizations, and institutional investors; and asset management and investor services, including pension fund management and administration, pension structure advisory, beneficiary payment, and investment trust services for retail customers. Further, it provides loans, deposits, fund transfers, hedging, and investments services for retail, small and medium-sized enterprise, as well as corporate customers; financing for automotive and consumer goods; sells and trades in fixed income instruments, currencies, equities, and equities; offers investment products comprising mutual funds, structured bonds, and notes; originates and distributes of financial products; and provides insurance and treasury services. The company was founded in 1880 and is headquartered in Tokyo, Japan.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.