VersaBank (NASDAQ:VBNK – Get Rating) and NatWest Group (NYSE:NWG – Get Rating) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.
Valuation & Earnings
This table compares VersaBank and NatWest Group's top-line revenue, earnings per share (EPS) and valuation.
Get VersaBank alerts:| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| VersaBank | $102.93 million | 1.99 | $17.60 million | $0.61 | 12.34 |
| NatWest Group | $16.52 billion | 1.91 | $4.49 billion | $0.63 | 10.22 |
NatWest Group has higher revenue and earnings than VersaBank. NatWest Group is trading at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
30.2% of VersaBank shares are held by institutional investors. Comparatively, 0.9% of NatWest Group shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.Dividends
VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.9%. NatWest Group pays an annual dividend of $0.17 per share and has a dividend yield of 2.6%. VersaBank pays out 11.5% of its earnings in the form of a dividend. NatWest Group pays out 26.9% 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.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for VersaBank and NatWest Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| VersaBank | 0 | 0 | 2 | 0 | 3.00 |
| NatWest Group | 0 | 3 | 5 | 0 | 2.63 |
VersaBank presently has a consensus price target of $9.00, suggesting a potential upside of 19.52%. Given VersaBank's stronger consensus rating and higher probable upside, research analysts plainly believe VersaBank is more favorable than NatWest Group.
Volatility & Risk
VersaBank has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, NatWest Group has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.
Profitability
This table compares VersaBank and NatWest Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| VersaBank | 17.14% | 6.54% | 0.79% |
| NatWest Group | 18.05% | 6.75% | 0.33% |
Summary
NatWest Group beats VersaBank on 8 of the 15 factors compared between the two stocks.
About VersaBank
(Get Rating)
VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; and commercial banking services comprising commercial real estate, public sector/infrastructure financing, condominium financing, and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.
About NatWest Group
(Get Rating)
NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Commercial Banking, Private Banking, RBS International, and NatWest Markets segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Commercial Banking segment offers banking and financing solutions to start-up, SME, commercial, corporate, and institutional customers. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The RBS International segment offers banking various products and services to institutional customers. It also operates in wholesale branches and fund depositary service businesses. The NatWest Markets segment provides services to corporate and institutional customers for the management of financial risks for achieving short-term and long-term sustainable financial goals. NatWest Group plc operates approximately 800 branches and 16,000 physical points of presence. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.
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