Head to Head Analysis: BankUnited (NYSE:BKU) vs. Berkshire Hills Bancorp (BHLB)

Berkshire Hills Bancorp (NYSE: BHLB) and BankUnited (NYSE:BKU) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Profitability

This table compares Berkshire Hills Bancorp and BankUnited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Berkshire Hills Bancorp 15.03% 6.93% 0.85%
BankUnited 19.54% 9.81% 0.87%

Dividends

Berkshire Hills Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. Berkshire Hills Bancorp pays out 46.2% of its earnings in the form of a dividend. BankUnited pays out 37.7% 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. BankUnited has increased its dividend for 2 consecutive years. BankUnited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

62.5% of Berkshire Hills Bancorp shares are owned by institutional investors. 2.8% of Berkshire Hills Bancorp shares are owned by insiders. Comparatively, 5.1% of BankUnited shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Berkshire Hills Bancorp has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, BankUnited has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Earnings & Valuation

This table compares Berkshire Hills Bancorp and BankUnited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Berkshire Hills Bancorp $336.88 million 3.73 $67.93 million $1.82 18.52
BankUnited $973.23 million 3.65 $238.16 million $2.23 14.91

BankUnited has higher revenue and earnings than Berkshire Hills Bancorp. BankUnited is trading at a lower price-to-earnings ratio than Berkshire Hills Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Berkshire Hills Bancorp and BankUnited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Berkshire Hills Bancorp 0 3 2 0 2.40
BankUnited 0 3 7 0 2.70

Berkshire Hills Bancorp currently has a consensus price target of $35.00, suggesting a potential upside of 3.86%. BankUnited has a consensus price target of $40.82, suggesting a potential upside of 22.80%. Given BankUnited’s stronger consensus rating and higher possible upside, analysts plainly believe BankUnited is more favorable than Berkshire Hills Bancorp.

Summary

BankUnited beats Berkshire Hills Bancorp on 15 of the 17 factors compared between the two stocks.

About Berkshire Hills Bancorp

Berkshire Hills Bancorp, Inc. (Berkshire) is a holding company for Berkshire Bank (the Bank) and Berkshire Insurance Group. Berkshire offers a range of deposit, lending, insurance and wealth management products to retail, commercial, not-for-profit and municipal customers in its market areas. Berkshire product offerings also include retail and commercial electronic banking, commercial cash management and commercial interest rate swaps. The Bank’s loan portfolio consists of commercial loans, which include residential mortgages, commercial real estate, commercial and industrial loans, and consumer loans. The Bank’s securities available for sale include municipal bonds and obligations, mortgage-backed securities, other bonds and obligations, and marketable equity securities. As of December 5, 2016, the Bank had 99 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania.

About BankUnited

BankUnited, Inc. is the bank holding company of BankUnited (the Bank). The bank is a national banking association. As of December 31, 2016, the Bank provided a range of banking services to individual and corporate customers through 94 banking centers located in 15 Florida counties and six banking centers in the New York metropolitan area. The Bank also provides a range of traditional banking products and services to both its commercial and retail customers. The Company offers a range of lending products, including small business loans, commercial real estate loans, equipment loans and leases, term loans, formula-based loans, municipal and non-profit loans and leases, commercial and mortgage warehouse lines of credit, letters of credit and consumer loans. It offers traditional deposit products, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of terms and rates.

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