Critical Analysis: UBS (OTCMKTS:OUBSF) vs. Webster Financial (NYSE:WBS)

Webster Financial (NYSE:WBS) and UBS (OTCMKTS:OUBSF) 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.

Valuation and Earnings

This table compares Webster Financial and UBS”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Webster Financial	$3.94 billion	2.73	$867.84 million	$4.41	14.24
UBS	N/A	N/A	N/A	N/A	N/A

Webster Financial has higher revenue and earnings than UBS.

Profitability

This table compares Webster Financial and UBS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Webster Financial	18.80%	11.03%	1.23%
UBS	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings and price targets for Webster Financial and UBS, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Webster Financial	0	3	9	0	2.75
UBS	0	0	0	0	0.00

Webster Financial currently has a consensus price target of $57.85, suggesting a potential downside of 7.91%. Given UBS’s higher possible upside, analysts plainly believe UBS is more favorable than Webster Financial.

Institutional & Insider Ownership

85.6% of Webster Financial shares are held by institutional investors. 0.7% of Webster Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Webster Financial beats UBS on 8 of the 9 factors compared between the two stocks.

About Webster Financial

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of financial products and services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Consumer Banking. The Commercial Banking segment offers commercial real estate and equipment financing, business banking, asset-based lending, and commercial services; public sector finance; mortgage warehouse financing; sponsor and specialty financing services; credit, deposit, and cash flow management services; and wealth management solutions to business owners and operators, including trust, asset management, financial planning, insurance, retirement, and investment products, as well as treasury management services comprising derivative, treasury, accounts payable, accounts receivable, and trade products and services. This segment also provides commercial services, such as accounts receivable factoring and trade financing, payroll funding, and business process outsourcing. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefit services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. The Consumer Banking segment provides consumer deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers; and small business banking products, such as credit, deposit, and cash flow management products to businesses and professional service firms. The company offers online and mobile banking services. Webster Financial Corporation was founded in 1935 and is headquartered in Stamford, Connecticut.