Peapack-Gladstone Financial (NASDAQ:PGC) and Banco Santander (NYSE:SAN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

72.1% of Peapack-Gladstone Financial shares are held by institutional investors. Comparatively, 1.6% of Banco Santander shares are held by institutional investors. 4.8% of Peapack-Gladstone Financial shares are held by insiders. Comparatively, 9.5% of Banco Santander shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Peapack-Gladstone Financial and Banco Santander, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peapack-Gladstone Financial 0 0 3 0 3.00
Banco Santander 0 1 2 0 2.67

Peapack-Gladstone Financial currently has a consensus price target of $38.75, suggesting a potential upside of 32.16%. Banco Santander has a consensus price target of $6.20, suggesting a potential upside of 26.79%. Given Peapack-Gladstone Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Peapack-Gladstone Financial is more favorable than Banco Santander.

Dividends

Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Banco Santander pays an annual dividend of $0.23 per share and has a dividend yield of 4.7%. Peapack-Gladstone Financial pays out 10.3% of its earnings in the form of a dividend. Banco Santander pays out 44.2% 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.

Valuation and Earnings

This table compares Peapack-Gladstone Financial and Banco Santander’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peapack-Gladstone Financial $173.35 million 3.22 $36.49 million $1.94 15.11
Banco Santander $54.66 billion 1.43 $7.48 billion $0.52 9.40

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

Profitability

This table compares Peapack-Gladstone Financial and Banco Santander’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peapack-Gladstone Financial 22.54% 10.15% 0.98%
Banco Santander 13.97% 7.55% 0.56%

Risk and Volatility

Peapack-Gladstone Financial has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Banco Santander has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Summary

Peapack-Gladstone Financial beats Banco Santander on 11 of the 16 factors compared between the two stocks.

Peapack-Gladstone Financial Company Profile

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Private Wealth Management. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential and commercial mortgage, home equity lines of credit, and other second mortgage loans, as well as construction loans. In addition, it offers asset management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; corporate trust services comprising services as trustee for pension and profit sharing plans; and other financial planning and advisory services. Further, the company operates automated teller machines at 20 locations; and provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; and wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and wealth management branches in Somerset, Morris, Hunterdon, and Union counties. Peapack-Gladstone Financial Corporation was founded in 1921 and is based in Bedminster, New Jersey.

Banco Santander Company Profile

Banco Santander, S.A., together with its subsidiaries, provides various retail and commercial banking products and services for individual and corporate clients worldwide. It offers demand and time deposits, and current and savings accounts; certificates of deposit; mortgages, auto finance, and personal loans; working capital finance; and debit and credit cards, as well as life and non-life insurance products. The company also provides cash management, trade finance, custody and securities, and securitization services; corporate loans; capital market products; and syndicated corporate finance services. In addition, it is involved in the corporate banking, treasury, and investment banking activities; fixed income and equity derivatives; trading and hedging derivatives; and brokerage of equities. Further, the company offers asset management, private banking, and processing services, as well as mobile and online banking services. It operates through a network of 13,697 branches. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

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