Critical Survey: Inter & Co. Inc. (NASDAQ:INTR) vs. Provident Financial Services (NYSE:PFS)

Provident Financial Services (NYSE:PFS) and Inter & Co. Inc. (NASDAQ:INTR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Dividends

Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.2%. Inter & Co. Inc. pays an annual dividend of $0.11 per share and has a dividend yield of 2.8%. Provident Financial Services pays out 40.3% of its earnings in the form of a dividend. Inter & Co. Inc. pays out 16.7% 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.

Insider & Institutional Ownership

72.0% of Provident Financial Services shares are owned by institutional investors. Comparatively, 22.9% of Inter & Co. Inc. shares are owned by institutional investors. 3.0% of Provident Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Provident Financial Services and Inter & Co. Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Provident Financial Services	0	2	4	1	2.86
Inter & Co. Inc.	1	3	3	0	2.29

Provident Financial Services currently has a consensus price target of $26.79, suggesting a potential upside of 16.54%. Inter & Co. Inc. has a consensus price target of $9.30, suggesting a potential upside of 140.93%. Given Inter & Co. Inc.’s higher probable upside, analysts clearly believe Inter & Co. Inc. is more favorable than Provident Financial Services.

Profitability

This table compares Provident Financial Services and Inter & Co. Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Provident Financial Services	21.73%	10.82%	1.22%
Inter & Co. Inc.	11.23%	14.94%	1.57%

Volatility & Risk

Provident Financial Services has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Inter & Co. Inc. has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Provident Financial Services and Inter & Co. Inc.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Provident Financial Services	$1.38 billion	2.17	$291.16 million	$2.38	9.66
Inter & Co. Inc.	$1.93 billion	0.88	$235.05 million	$0.66	5.85

Provident Financial Services has higher earnings, but lower revenue than Inter & Co. Inc.. Inter & Co. Inc. is trading at a lower price-to-earnings ratio than Provident Financial Services, indicating that it is currently the more affordable of the two stocks.

Summary

Provident Financial Services beats Inter & Co. Inc. on 11 of the 17 factors compared between the two stocks.

About Provident Financial Services

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; 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, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it 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. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

About Inter & Co. Inc.

Inter & Co., Inc. Is a holding company, which engages in the provision of financial products and services. It operates through the following segments: Banking, Securities, Insurance Brokerage, Marketplace, Asset Management, Service, and Other. The Banking segment offers checking accounts cards, deposits, loans and advances, and other services through mobile application. The Securities segment is involved in the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market, and the provision of administration services to investment funds. The Insurance Brokerage segment includes insurance products underwritten by insurance companies, such as warranties, life, property and automobile insurance, and pension products, as well as consortium products provided by a third party. The Marketplace segment operates a digital platform, which offers goods and services to its customers. The Asset Management segment is composed of the operations related to the management of fund portfolios and other assets. The Service segment consists of collection and management of personal information, development and licensing of customized computer programs, development and licensing of non-customized computer programs and technical support, maintenance, and other information technology services. The company was founded on January 26, 2021 and is headquartered in Belo Horizonte, Brazil.