Financial Comparison: Lloyds Banking Group (NYSE:LYG) and WaFd (NASDAQ:WAFD)

WaFd (NASDAQ:WAFD) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for WaFd and Lloyds Banking Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaFd	0	4	0	1	2.40
Lloyds Banking Group	1	4	6	0	2.45

WaFd currently has a consensus target price of $32.50, indicating a potential upside of 10.32%. Lloyds Banking Group has a consensus target price of $6.00, indicating a potential upside of 10.80%. Given Lloyds Banking Group’s stronger consensus rating and higher possible upside, analysts clearly believe Lloyds Banking Group is more favorable than WaFd.

Valuation & Earnings

This table compares WaFd and Lloyds Banking Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaFd	$1.42 billion	1.54	$255.87 million	$3.21	9.18
Lloyds Banking Group	$25.61 billion	3.04	$6.14 billion	$0.43	12.59

Lloyds Banking Group has higher revenue and earnings than WaFd. WaFd is trading at a lower price-to-earnings ratio than Lloyds Banking Group, indicating that it is currently the more affordable of the two stocks.

Dividends

WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.7%. Lloyds Banking Group pays an annual dividend of $0.17 per share and has a dividend yield of 3.1%. WaFd pays out 33.6% of its earnings in the form of a dividend. Lloyds Banking Group pays out 39.5% 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. WaFd has raised its dividend for 2 consecutive years. WaFd is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

WaFd has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

83.7% of WaFd shares are held by institutional investors. Comparatively, 2.1% of Lloyds Banking Group shares are held by institutional investors. 1.5% of WaFd shares are held by insiders. Comparatively, 0.0% of Lloyds Banking Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares WaFd and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaFd	18.04%	9.37%	0.93%
Lloyds Banking Group	24.97%	10.94%	0.54%

Summary

Lloyds Banking Group beats WaFd on 10 of the 18 factors compared between the two stocks.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.