Head-To-Head Survey: State Street (STT) vs. State Bank Financial (STBZ)

State Street (NYSE:STT) and State Bank Financial (NASDAQ:STBZ) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.

Earnings and Valuation

This table compares State Street and State Bank Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
State Street $11.81 billion 2.70 $2.18 billion $5.96 14.62
State Bank Financial $248.13 million 4.71 $46.57 million $1.46 20.47

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for State Street and State Bank Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State Street 0 6 7 0 2.54
State Bank Financial 0 6 1 0 2.14

State Street presently has a consensus target price of $105.00, indicating a potential upside of 20.50%. State Bank Financial has a consensus target price of $35.90, indicating a potential upside of 20.15%. Given State Street’s stronger consensus rating and higher probable upside, research analysts plainly believe State Street is more favorable than State Bank Financial.

Profitability

This table compares State Street and State Bank Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State Street 19.56% 14.98% 1.19%
State Bank Financial 20.06% 10.64% 1.38%

Risk and Volatility

State Street has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, State Bank Financial has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

86.7% of State Street shares are held by institutional investors. Comparatively, 79.0% of State Bank Financial shares are held by institutional investors. 0.4% of State Street shares are held by company insiders. Comparatively, 4.4% of State Bank Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

State Street pays an annual dividend of $1.88 per share and has a dividend yield of 2.2%. State Bank Financial pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. State Street pays out 31.5% of its earnings in the form of a dividend. State Bank Financial pays out 54.8% 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. State Street has increased its dividend for 7 consecutive years and State Bank Financial has increased its dividend for 5 consecutive years.

Summary

State Street beats State Bank Financial on 11 of the 17 factors compared between the two stocks.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody; product and participant level accounting; daily pricing and administration; master trust and master custody; depotbank services; record-keeping; cash management; foreign exchange, brokerage, and other trading services; securities finance; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also provides investment management services, such as investment management, investment research, and investment advisory services to corporations, public funds, and other sophisticated investors, as well as offers passive and active asset management strategies across equity, fixed-income, alternative, multi-asset solutions, and cash asset classes. The company offers its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

About State Bank Financial

State Bank Financial Corporation operates as the bank holding company for State Bank and Trust Company that provides various community banking services to individuals and businesses. The company's deposit products and services include checking, commercial operating, savings and money market, and individual retirement accounts, as well as short- to longer-term certificates of deposit, commercial and consumer demand deposit, and savings and time deposit products. It also provides commercial and residential real estate mortgage, real estate construction, commercial and industrial, agriculture and consumer, real estate, real estate construction and development, commercial, financial, and agricultural loans, as well as loans to small and medium-sized businesses. In addition, the company offers correspondent banking products; payment solutions for funds collection and concentration services, such as ACH origination, electronic bill presentment and payment, remote deposit capture and cash deposit, retail and wholesale lockbox, and wire services. Further, it provides cash management accounts; disbursement services comprising online bill pay, person-to-person payments, and bank-to-bank transfers; fraud controls that include Positive Pay, ACH Decisioning, and IBM Security Trusteer Rapport malware protection; and online cash management systems. Additionally, the company offers payroll services, which comprise automated human resources information system, payroll, benefit, labor management, and insurance services; and online banking and bill payment, safe deposit box rental, debit card, and automated teller machine card services. As of December 31, 2017, it operated 32 full-service banking offices in Georgia, which comprises Bibb, Chatham, Clarke, Cobb, Columbia, Dooly, Fulton, Gwinnett, Hall, Houston, Jones, Liberty, McDuffie, Richmond, and Tattnall counties. The company was founded in 2005 and is headquartered in Atlanta, Georgia.

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