BB&T (NYSE:BBT) and Clarkston Financial (NYSE:CKFC) Critical Analysis

BB&T (NYSE:BBT) and Clarkston Financial (OTCMKTS:CKFC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Risk & Volatility

BB&T has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Clarkston Financial has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Profitability

This table compares BB&T and Clarkston Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BB&T 23.58% 12.23% 1.49%
Clarkston Financial 24.55% 13.52% 1.14%

Insider & Institutional Ownership

70.2% of BB&T shares are held by institutional investors. 0.5% of BB&T shares are held by company insiders. Comparatively, 35.8% of Clarkston Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for BB&T and Clarkston Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BB&T 0 6 9 0 2.60
Clarkston Financial 0 0 0 0 N/A

BB&T currently has a consensus price target of $54.70, suggesting a potential upside of 7.31%. Given BB&T’s higher probable upside, equities research analysts clearly believe BB&T is more favorable than Clarkston Financial.

Dividends

BB&T pays an annual dividend of $1.80 per share and has a dividend yield of 3.5%. Clarkston Financial does not pay a dividend. BB&T pays out 44.4% of its earnings in the form of a dividend. BB&T has increased its dividend for 7 consecutive years.

Earnings and Valuation

This table compares BB&T and Clarkston Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BB&T $13.00 billion 3.01 $3.24 billion $4.05 12.59
Clarkston Financial $9.22 million 3.64 $2.35 million N/A N/A

BB&T has higher revenue and earnings than Clarkston Financial.

Summary

BB&T beats Clarkston Financial on 9 of the 15 factors compared between the two stocks.

About BB&T

BB&T Corporation, a holding company, provides banking and trust services for small and mid-size businesses, public agencies, local governments, corporations, and individuals in the Southeastern and Mid-Atlantic United States. The company operates through four segments: Community Banking Retail and Consumer Finance, Community Banking Commercial, Insurance Holdings, and Financial Services and Commercial Finance. 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; bankcard lending; consumer finance; home equity and mortgage lending; insurance, such as property and casualty, life, health, employee benefits, commercial general liability, surety, title and other insurance products; investment brokerage; mobile/online banking; and payment, lease financing, small business lending, and wealth management/private banking services. In addition, it offers association, capital market, institutional trust, insurance premium and commercial finance, international banking, leasing, merchant, commercial deposit and treasury, commercial middle market lending, floor plan lending, commercial mortgage lending, mortgage warehouse lending, private equity investment, real estate lending, and supply chain financing services. Further, the company provides retail brokerage, equity and debt underwriting, investment advice, and corporate finance, as well as facilitates the origination, trading, and distribution of fixed-income securities and equity products. It also offers discount brokerage services, equities, fixed-rate and variable-rate annuities, mutual funds, and government and municipal bonds. As of December 31, 2018, the company operated through approximately 1,879 financial centers. The company was founded in 1872 and is headquartered in Winston-Salem, North Carolina.

About Clarkston Financial

Clarkston Financial Corporation operates as a bank holding company for Clarkston State Bank, provides a range of banking products to retail and commercial customers in Michigan. The company offers checking, savings, money market, time deposit, and demand deposit accounts, as well as CDs and IRAs; commercial loan products, such as commercial real estate loans, small business administration loans, construction loans, equipment/fixed asset acquisition loans, lines of credit, letters of credit, and working capital and term loans; and consumer loan products, including auto loans, boat loans, motorcycle and RV loans, home equity lines of credit, and home equity loans, as well as credit cards. It also provides overdraft protection, cash management, and credit card merchant processing services; safe deposit boxes and sweep accounts; and check imaging, telephone banking, mobile banking, online banking, and wire transfer, and automated transaction machine services. The company operates through two full service branches. Clarkston Financial Corporation was founded in 1998 and is based in Waterford, Michigan.

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