Park National (NYSE:PRK) versus Regions Financial (NYSE:RF) Critical Contrast

Regions Financial (NYSE:RF) and Park National (NYSE:PRK) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Insider and Institutional Ownership

79.4% of Regions Financial shares are owned by institutional investors. Comparatively, 62.7% of Park National shares are owned by institutional investors. 0.3% of Regions Financial shares are owned by insiders. Comparatively, 2.7% of Park National shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Regions Financial has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Park National has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.15 billion	2.44	$2.07 billion	$1.77	13.86
Park National	$564.30 million	4.87	$126.73 million	$8.45	20.14

Regions Financial has higher revenue and earnings than Park National. Regions Financial is trading at a lower price-to-earnings ratio than Park National, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Regions Financial and Park National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	18.78%	12.60%	1.30%
Park National	22.09%	12.05%	1.44%

Analyst Recommendations

This is a breakdown of current ratings for Regions Financial and Park National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	1	6	11	0	2.56
Park National	0	2	0	0	2.00

Regions Financial currently has a consensus target price of $27.67, indicating a potential upside of 12.81%. Park National has a consensus target price of $130.00, indicating a potential downside of 23.60%. Given Regions Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Regions Financial is more favorable than Park National.

Dividends

Regions Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Park National pays an annual dividend of $4.24 per share and has a dividend yield of 2.5%. Regions Financial pays out 56.5% of its earnings in the form of a dividend. Park National pays out 50.2% 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. Regions Financial has increased its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Regions Financial beats Park National on 10 of the 17 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About Park National

Park National Corporation operates as the bank holding company for Park National Bank that provides commercial banking and trust services in small and medium population areas. The company offers deposits for demand, savings, and time accounts; trust and wealth management services; cash management services; safe deposit operations; electronic funds transfers; Internet and mobile banking solutions with bill pay service; credit cards; and various additional banking-related services. It also provides commercial loans, including financing for industrial and commercial properties, financing for equipment, inventory and accounts receivable, acquisition financing, and commercial leasing, as well as for consumer finance companies; commercial real estate loans comprising mortgage loans to developers and owners of commercial real estate; originates financing leases primarily for the purchase of commercial vehicles, operating/manufacturing equipment, and municipal vehicles/equipment; consumer loans, such as automobile loans; consumer finance services; home equity lines of credit; and residential real estate and construction loans, as well as installment loans and commercial loans. In addition, the company offers aircraft financing services; and ParkDirect, a personal banking application. Park National Corporation was founded in 1908 and is headquartered in Newark, Ohio.