Associated Banc (NYSE:ASB – Get Free Report) and Sumitomo Mitsui Trust (OTCMKTS:SUTNY – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.
Institutional and Insider Ownership
83.0% of Associated Banc shares are owned by institutional investors. 0.7% of Associated Banc shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Associated Banc and Sumitomo Mitsui Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Associated Banc | 19.87% | 10.75% | 1.13% |
| Sumitomo Mitsui Trust | 11.81% | 10.45% | 0.45% |
Dividends
Associated Banc pays an annual dividend of $0.96 per share and has a dividend yield of 3.1%. Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 1.8%. Associated Banc pays out 33.2% of its earnings in the form of a dividend. Sumitomo Mitsui Trust pays out 23.3% 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. Associated Banc has raised its dividend for 13 consecutive years. Associated Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Associated Banc and Sumitomo Mitsui Trust”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Associated Banc | $2.46 billion | 2.33 | $474.78 million | $2.89 | 10.67 |
| Sumitomo Mitsui Trust | $19.82 billion | 1.54 | $1.99 billion | $0.43 | 12.86 |
Sumitomo Mitsui Trust has higher revenue and earnings than Associated Banc. Associated Banc is trading at a lower price-to-earnings ratio than Sumitomo Mitsui Trust, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Associated Banc and Sumitomo Mitsui Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Associated Banc | 0 | 6 | 6 | 0 | 2.50 |
| Sumitomo Mitsui Trust | 0 | 1 | 0 | 0 | 2.00 |
Associated Banc currently has a consensus target price of $32.70, suggesting a potential upside of 6.05%. Given Associated Banc’s stronger consensus rating and higher probable upside, analysts clearly believe Associated Banc is more favorable than Sumitomo Mitsui Trust.
Summary
Associated Banc beats Sumitomo Mitsui Trust on 12 of the 16 factors compared between the two stocks.
About Associated Banc
Associated Banc-Corp is a bank holding company headquartered in Green Bay, Wisconsin. Its principal subsidiary, Associated Bank, provides banking and financial services to individuals, businesses, and organizations. The company offers consumer and commercial banking products, including deposit accounts, mortgage and other lending, business financing, and cash-management services. It also provides wealth management and related financial services. Associated Bank primarily serves customers in Wisconsin, Illinois, and Minnesota through its branches and other service channels.
About Sumitomo Mitsui Trust
Sumitomo Mitsui Trust Group, Inc. is a Japan-based financial holding company whose businesses include banking, asset management, investor services and real estate. Its offerings include trust and banking services, investment products, pension and custody services, securities administration, and real estate brokerage and consulting. The group serves individuals, businesses, institutional investors and public-sector clients, primarily in Japan. It also maintains international operations to support cross-border banking, asset management and investor services.
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