First Republic Bank (FRC) & Lloyds Banking Group (LYG) Head to Head Survey

First Republic Bank (NYSE:FRC) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares First Republic Bank and Lloyds Banking Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Republic Bank 24.05% 11.47% 0.89%
Lloyds Banking Group 15.05% 15.62% 0.93%

Earnings & Valuation

This table compares First Republic Bank and Lloyds Banking Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Republic Bank $2.91 billion 5.03 $757.66 million $4.31 21.55
Lloyds Banking Group $50.67 billion 1.09 $4.91 billion $0.55 5.58

Lloyds Banking Group has higher revenue and earnings than First Republic Bank. Lloyds Banking Group is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.

Dividends

First Republic Bank pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. Lloyds Banking Group pays an annual dividend of $0.11 per share and has a dividend yield of 3.6%. First Republic Bank pays out 16.7% of its earnings in the form of a dividend. Lloyds Banking Group pays out 20.0% 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. First Republic Bank has increased its dividend for 5 consecutive years and Lloyds Banking Group has increased its dividend for 2 consecutive years.

Volatility and Risk

First Republic Bank has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Republic Bank and Lloyds Banking Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Republic Bank 0 9 5 0 2.36
Lloyds Banking Group 1 6 4 0 2.27

First Republic Bank currently has a consensus target price of $102.46, indicating a potential upside of 10.29%. Given First Republic Bank’s stronger consensus rating and higher probable upside, analysts plainly believe First Republic Bank is more favorable than Lloyds Banking Group.

Institutional and Insider Ownership

2.4% of Lloyds Banking Group shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

First Republic Bank beats Lloyds Banking Group on 9 of the 16 factors compared between the two stocks.

About First Republic Bank

First Republic Bank, together with its subsidiaries, provides private banking, private business banking, real estate lending, and wealth management services to clients in metropolitan areas of the United States. It operates through two segments, Commercial Banking and Wealth Management. The company offers deposit products, such as checking, money market checking, savings, and passbook deposits, as well as certificates of deposit. It also provides a range of lending products that comprise residential mortgage loans, home equity lines of credit, multifamily loans, commercial real estate loans, residential construction loans, personal loans, business loans, and smaller loans and lines of credit to businesses and individuals. The company's loans are secured by single family residences, multifamily buildings, and commercial real estate properties. In addition, it provides wealth management services, which include various investment strategies and products, trust and custody services, full service and online brokerage, financial and estate planning, and access to alternative investments, as well as investing, insurance, and foreign exchange services. As of December 31, 2017, the company offered its services through 76 offices, including 70 preferred banking licensed deposit-taking offices in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; and New York, New York, as well as 6 offices that provided lending, wealth management, and trust services. First Republic Bank was founded in 1985 and is headquartered in San Francisco, California.

About Lloyds Banking Group

Lloyds Banking Group plc provides banking and financial services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands in the United Kingdom and internationally. The company operates through three segments: Retail, Commercial Banking, and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings accounts, mortgages, motor finance, and unsecured consumer lending products to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, term lending, and debt capital markets services for small and medium sized enterprises, corporates, mid-markets, and financial institutions. The Insurance and Wealth segment offers insurance products, such as life, home, motor, and protection insurance; investments comprising pensions and investment products; and wealth management products and services. It also provides credit cards, and personal and business loans; and online and telephone banking services. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

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