Analyzing Fulton Financial (NASDAQ:FULT) and NatWest Group (NYSE:NWG)

NatWest Group (NYSE:NWG) and Fulton Financial (NASDAQ:FULT) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Valuation & Earnings

This table compares NatWest Group and Fulton Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NatWest Group	$38.91 billion	1.83	$7.69 billion	$2.01	8.92
Fulton Financial	$1.89 billion	2.29	$391.61 million	$2.09	10.89

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for NatWest Group and Fulton Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NatWest Group	0	3	4	1	2.75
Fulton Financial	0	3	2	0	2.40

Fulton Financial has a consensus price target of $24.75, suggesting a potential upside of 8.79%. Given Fulton Financial’s higher probable upside, analysts clearly believe Fulton Financial is more favorable than NatWest Group.

Dividends

NatWest Group pays an annual dividend of $0.63 per share and has a dividend yield of 3.5%. Fulton Financial pays an annual dividend of $0.76 per share and has a dividend yield of 3.3%. NatWest Group pays out 31.3% of its earnings in the form of a dividend. Fulton Financial pays out 36.4% 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. Fulton Financial has increased its dividend for 4 consecutive years. NatWest Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

1.3% of NatWest Group shares are owned by institutional investors. Comparatively, 72.0% of Fulton Financial shares are owned by institutional investors. 0.0% of Fulton Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

NatWest Group has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Fulton Financial has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares NatWest Group and Fulton Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NatWest Group	20.10%	14.01%	0.82%
Fulton Financial	20.63%	12.68%	1.30%

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

About Fulton Financial

Fulton Financial Corporation operates as a financial holding company that provides consumer and commercial banking products and services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. It accepts various checking accounts and savings deposit products, certificates of deposit, and individual retirement accounts. The company offers consumer loans products, including home equity loans and lines of credit, automobile loans, personal lines of credit, and checking account overdraft protection; construction and jumbo residential mortgage loans; and commercial lending products comprising commercial real estate, commercial and industrial, and construction loans, as well as equipment lease financing loans. In addition, it offers letters of credit, cash management services, and traditional deposit products; and wealth management services, including investment management, trust, brokerage, insurance, and investment advisory services. Further, the company owns trust preferred securities; and sells various life insurance products. It provides its products and services through financial center offices, as well as through a network of automated teller machines, telephone banking, mobile banking, and online banking. Fulton Financial Corporation was founded in 1882 and is headquartered in Lancaster, Pennsylvania.