UBS Group (NYSE:UBS – Get Free Report) and Truist Financial (NYSE:TFC – Get Free Report) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.
Institutional & Insider Ownership
71.3% of Truist Financial shares are held by institutional investors. 1.0% of UBS Group shares are held by insiders. Comparatively, 0.2% of Truist Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings and price targets for UBS Group and Truist Financial, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| UBS Group | 0 | 3 | 3 | 0 | 2.50 |
| Truist Financial | 0 | 11 | 11 | 0 | 2.50 |
Truist Financial has a consensus price target of $45.30, indicating a potential upside of 8.68%. Given Truist Financial’s higher possible upside, analysts clearly believe Truist Financial is more favorable than UBS Group.
Earnings and Valuation
This table compares UBS Group and Truist Financial’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| UBS Group | $65.28 billion | 1.44 | $27.85 billion | $9.18 | 3.19 |
| Truist Financial | $33.25 billion | 1.68 | -$1.09 billion | ($1.32) | -31.58 |
UBS Group has higher revenue and earnings than Truist Financial. Truist Financial is trading at a lower price-to-earnings ratio than UBS Group, indicating that it is currently the more affordable of the two stocks.
Dividends
UBS Group pays an annual dividend of $0.23 per share and has a dividend yield of 0.8%. Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 5.0%. UBS Group pays out 2.5% of its earnings in the form of a dividend. Truist Financial pays out -157.6% 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. Truist Financial has increased its dividend for 13 consecutive years. Truist Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
UBS Group has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Truist Financial has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.
Profitability
This table compares UBS Group and Truist Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| UBS Group | 39.78% | 7.78% | 0.40% |
| Truist Financial | -5.63% | 9.18% | 0.94% |
Summary
Truist Financial beats UBS Group on 9 of the 16 factors compared between the two stocks.
About UBS Group
UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.
About Truist Financial
Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.
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Source: defenseworld.net
