Head to Head Review: National Bank of Canada (OTCMKTS:NTIOF) and Western Alliance Bancorporation (NYSE:WAL)

Western Alliance Bancorporation (NYSE:WAL) and National Bank of Canada (OTCMKTS:NTIOF) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Western Alliance Bancorporation and National Bank of Canada, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Alliance Bancorporation	0	4	12	0	2.75
National Bank of Canada	0	5	3	0	2.38

Western Alliance Bancorporation presently has a consensus target price of $92.44, suggesting a potential upside of 21.14%. Given Western Alliance Bancorporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Western Alliance Bancorporation is more favorable than National Bank of Canada.

Dividends

Western Alliance Bancorporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. National Bank of Canada pays an annual dividend of $3.81 per share and has a dividend yield of 2.5%. Western Alliance Bancorporation pays out 18.6% of its earnings in the form of a dividend. National Bank of Canada pays out 44.1% 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. Western Alliance Bancorporation has raised its dividend for 5 consecutive years.

Institutional & Insider Ownership

79.2% of Western Alliance Bancorporation shares are held by institutional investors. Comparatively, 0.1% of National Bank of Canada shares are held by institutional investors. 2.8% of Western Alliance Bancorporation shares are held by company insiders. Comparatively, 0.3% of National Bank of Canada shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Western Alliance Bancorporation and National Bank of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Alliance Bancorporation	17.34%	13.50%	1.07%
National Bank of Canada	17.22%	16.67%	0.85%

Valuation and Earnings

This table compares Western Alliance Bancorporation and National Bank of Canada”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Alliance Bancorporation	$5.37 billion	1.53	$969.00 million	$9.05	8.43
National Bank of Canada	$21.96 billion	2.64	$2.87 billion	$8.63	17.60

National Bank of Canada has higher revenue and earnings than Western Alliance Bancorporation. Western Alliance Bancorporation is trading at a lower price-to-earnings ratio than National Bank of Canada, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Western Alliance Bancorporation has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, National Bank of Canada has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Summary

Western Alliance Bancorporation beats National Bank of Canada on 11 of the 17 factors compared between the two stocks.

About Western Alliance Bancorporation

Western Alliance Bancorporation is a bank holding company headquartered in Phoenix, Arizona, and the parent of Western Alliance Bank. The company provides commercial banking and related financial services to businesses, business owners and individuals. Its services include business and commercial real estate lending, deposit accounts, treasury management, and specialized banking for industries such as technology, healthcare, and property management. Through its banking divisions and specialized business lines, Western Alliance serves clients across the western United States and beyond.

About National Bank of Canada

National Bank of Canada is a diversified financial services institution headquartered in Montreal, Quebec. Founded in 1859, it serves individuals, businesses, institutional clients and public-sector organizations, with a strong presence in Quebec and operations across Canada. The bank provides personal and commercial banking services, including deposit accounts, lending, payment services and financial advice. Its other activities include wealth management, investment banking and capital markets services, as well as specialized financial services for clients in Canada and select international markets.