Analyzing Northwest Bancshares (NASDAQ:NWBI) & Truist Financial (NYSE:TFC)

Northwest Bancshares (NASDAQ:NWBI) and Truist Financial (NYSE:TFC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.

Profitability

This table compares Northwest Bancshares and Truist Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Bancshares	14.28%	8.72%	0.93%
Truist Financial	-5.63%	9.18%	0.94%

Analyst Ratings

This is a breakdown of current ratings and target prices for Northwest Bancshares and Truist Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Bancshares	1	1	0	0	1.50
Truist Financial	0	11	11	0	2.50

Northwest Bancshares currently has a consensus price target of $11.00, indicating a potential downside of 15.58%. Truist Financial has a consensus price target of $45.45, indicating a potential upside of 9.17%. Given Truist Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Truist Financial is more favorable than Northwest Bancshares.

Insider & Institutional Ownership

66.3% of Northwest Bancshares shares are held by institutional investors. Comparatively, 71.3% of Truist Financial shares are held by institutional investors. 1.1% of Northwest Bancshares shares are held by insiders. Comparatively, 0.2% of Truist Financial shares are held 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.

Valuation & Earnings

This table compares Northwest Bancshares and Truist Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Bancshares	$502.30 million	3.30	$134.96 million	$1.03	12.65
Truist Financial	$33.25 billion	1.68	-$1.09 billion	($1.32)	-31.54

Northwest Bancshares has higher earnings, but lower revenue than Truist Financial. Truist Financial is trading at a lower price-to-earnings ratio than Northwest Bancshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.1%. Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 5.0%. Northwest Bancshares pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Truist Financial pays out -157.6% of its earnings in the form of a dividend. Truist Financial has increased its dividend for 13 consecutive years.

Risk & Volatility

Northwest Bancshares has a beta of 0.62, meaning that its stock price is 38% less 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.

Summary

Truist Financial beats Northwest Bancshares on 10 of the 17 factors compared between the two stocks.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate; home equity loans and lines of credit; commercial business and real estate loans; commercial loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. The company operates community banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.

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.