Head to Head Review: Provident Financial Services (NYSE:PFS) vs. BBX Capital (NYSE:BBXTB)

BBX Capital (OTCMKTS:BBXTB) and Provident Financial Services (NYSE:PFS) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Volatility & Risk

BBX Capital has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, Provident Financial Services has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Dividends

BBX Capital pays an annual dividend of $0.05 per share and has a dividend yield of 1.1%. Provident Financial Services pays an annual dividend of $0.92 per share and has a dividend yield of 3.7%. Provident Financial Services pays out 50.5% of its earnings in the form of a dividend. Provident Financial Services has increased its dividend for 8 consecutive years. Provident Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares BBX Capital and Provident Financial Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BBX Capital $961.79 million 0.47 $35.10 million N/A N/A
Provident Financial Services $418.51 million 3.93 $118.39 million $1.82 13.52

Provident Financial Services has lower revenue, but higher earnings than BBX Capital.

Insider & Institutional Ownership

64.8% of Provident Financial Services shares are owned by institutional investors. 88.2% of BBX Capital shares are owned by company insiders. Comparatively, 3.0% of Provident Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for BBX Capital and Provident Financial Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BBX Capital 0 0 0 0 N/A
Provident Financial Services 0 2 1 0 2.33

Provident Financial Services has a consensus price target of $25.75, indicating a potential upside of 4.63%. Given Provident Financial Services’ higher possible upside, analysts clearly believe Provident Financial Services is more favorable than BBX Capital.

Profitability

This table compares BBX Capital and Provident Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BBX Capital 4.99% 7.82% 2.94%
Provident Financial Services 28.66% 9.03% 1.25%

Summary

Provident Financial Services beats BBX Capital on 10 of the 15 factors compared between the two stocks.

About BBX Capital

BBX Capital Corporation, formerly known as BFC Financial Corporation, is a private equity and venture capital firm specializing in investments and acquisitions of middle market companies. The firm also invests in mergers and acquisition, add-on acquisitions, divestiture, taking public companies private and private companies public, leveraged buyout, partnership, recapitalization, and restructuring. It typically does not invest in industries or companies whose ultimate returns are event driven. The firm seeks to invest across a broad range of industries ranging from service to manufacturing businesses. The firm prefers to acquire controlling interests in its portfolio companies and can also consider minority investments. BFC Financial Corporation was founded in 1980 and is based in Fort Lauderdale, Florida.

About Provident Financial Services

Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. The company's deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA, and KEOGH products. Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, it provides trust and estate administration services; and asset management services comprising investment management, asset allocation, trust and estate administration, financial planning, tax compliance and planning, and family office services to individuals, municipalities, non-profits, corporations, and pension funds. Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. As of December 31, 2018, it operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

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