Comparing BankUnited (NYSE:BKU) and WaFd (NASDAQ:WAFD)

BankUnited (NYSE:BKU) and WaFd (NASDAQ:WAFD) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

99.7% of BankUnited shares are held by institutional investors. Comparatively, 83.7% of WaFd shares are held by institutional investors. 1.0% of BankUnited shares are held by insiders. Comparatively, 1.5% of WaFd shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

BankUnited pays an annual dividend of $1.32 per share and has a dividend yield of 3.0%. WaFd pays an annual dividend of $1.08 per share and has a dividend yield of 3.3%. BankUnited pays out 36.2% of its earnings in the form of a dividend. WaFd pays out 34.1% 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. BankUnited has raised its dividend for 4 consecutive years and WaFd has raised its dividend for 2 consecutive years. WaFd is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for BankUnited and WaFd, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BankUnited	3	4	6	1	2.36
WaFd	0	4	1	0	2.20

BankUnited presently has a consensus price target of $51.55, suggesting a potential upside of 15.60%. WaFd has a consensus price target of $36.25, suggesting a potential upside of 9.82%. Given BankUnited’s stronger consensus rating and higher probable upside, equities analysts clearly believe BankUnited is more favorable than WaFd.

Risk and Volatility

BankUnited has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, WaFd has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.

Valuation & Earnings

This table compares BankUnited and WaFd”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BankUnited	$1.12 billion	2.83	$268.35 million	$3.65	12.22
WaFd	$782.48 million	3.12	$226.07 million	$3.17	10.41

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

Profitability

This table compares BankUnited and WaFd’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BankUnited	14.76%	9.13%	0.79%
WaFd	18.47%	8.98%	0.89%

Summary

BankUnited beats WaFd on 12 of the 18 factors compared between the two stocks.

About BankUnited

BankUnited, Inc. operates as the bank holding company for BankUnited, a national banking association that provides a range of banking services in the United States. The company offers deposit products, such as checking, money market deposit, and savings accounts; certificates of deposit; and treasury, commercial payment, and cash management services. Its loans portfolio includes commercial loans, including equipment loans, secured and unsecured lines of credit, formula-based lines of credit, owner-occupied commercial real estate term loans and lines of credit, mortgage warehouse lines, subscription finance facilities, letters of credit, commercial credit cards, small business administration and U.S. department of agriculture product offerings, export-import bank financing products, trade finance, and business acquisition finance credit facilities; commercial real estate loans; residential mortgages; and other consumer loans. The company offers online, mobile, and telephone banking services. It operates through a network of banking centers located in Florida counties and the New York metropolitan area, as well as Dallas, Texas. The company was formerly known as BU Financial Corporation. BankUnited, Inc. was incorporated in 2009 and is headquartered in Miami Lakes, Florida.

About WaFd

WaFd, Inc operates as the bank holding company for Washington Federal Bank that provides lending, depository, insurance, and other banking services in the United States. The company offers deposit products, including business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also provides single-family dwellings, construction, land acquisition and development, consumer lot, multi-family residential, commercial real estate, home equity, business, and consumer loans, as well as commercial and industrial loans. In addition, the company offers insurance brokerage services, such as individual and business insurance policies; holds and markets real estate properties; and debit and credit cards, as well as acts as the trustee. It serves consumers, mid-sized and large businesses, and owners and developers of commercial real estate. The company was formerly known as Washington Federal, Inc. and changed its name to WaFd, Inc in September 2023. WaFd, Inc was founded in 1917 and is headquartered in Seattle, Washington.