Critical Comparison: Sterling Bancorp (NASDAQ:SBT) versus Its Peers

Sterling Bancorp (NASDAQ: SBT) is one of 93 publicly-traded companies in the “Federal savings institutions” industry, but how does it contrast to its peers? We will compare Sterling Bancorp to related businesses based on the strength of its earnings, analyst recommendations, valuation, risk, profitability, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current ratings for Sterling Bancorp and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sterling Bancorp 0 0 2 0 3.00
Sterling Bancorp Competitors 523 1435 1231 86 2.27

Sterling Bancorp currently has a consensus price target of $13.50, indicating a potential upside of 36.78%. As a group, “Federal savings institutions” companies have a potential upside of 13.50%. Given Sterling Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Sterling Bancorp is more favorable than its peers.

Profitability

This table compares Sterling Bancorp and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sterling Bancorp 33.72% 19.84% 2.00%
Sterling Bancorp Competitors 16.97% 8.59% 0.91%

Insider and Institutional Ownership

31.3% of Sterling Bancorp shares are held by institutional investors. Comparatively, 39.6% of shares of all “Federal savings institutions” companies are held by institutional investors. 3.0% of Sterling Bancorp shares are held by insiders. Comparatively, 9.5% of shares of all “Federal savings institutions” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Sterling Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Sterling Bancorp pays out 3.3% of its earnings in the form of a dividend. As a group, “Federal savings institutions” companies pay a dividend yield of 2.5% and pay out 35.5% of their earnings in the form of a dividend.

Risk & Volatility

Sterling Bancorp has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Sterling Bancorp’s peers have a beta of 0.51, suggesting that their average share price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares Sterling Bancorp and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Sterling Bancorp $183.81 million $63.47 million 8.23
Sterling Bancorp Competitors $903.94 million $212.26 million 15.84

Sterling Bancorp’s peers have higher revenue and earnings than Sterling Bancorp. Sterling Bancorp is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Sterling Bancorp beats its peers on 8 of the 15 factors compared.

Sterling Bancorp Company Profile

Sterling Bancorp, Inc. is a unitary thrift holding company. Its wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has primary branch operations in San Francisco and Los Angeles, California and New York City, and a loan production office in Seattle, Washington. Sterling offers a broad range of loan products to the residential and commercial markets, as well as retail and business banking services. Sterling also has an operations center and a branch in Southfield, Michigan. Sterling was named as the top performing community bank in the United States with total assets between $1 billion and $10 billion in 2017 by SNL/S&P Global Market Intelligence.

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