Head-To-Head Review: U.S. Bancorp (NYSE:USB) and NewtekOne (NASDAQ:NEWT)

NewtekOne (NASDAQ:NEWT) and U.S. Bancorp (NYSE:USB) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares NewtekOne and U.S. Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewtekOne	14.92%	18.73%	2.95%
U.S. Bancorp	14.75%	12.94%	0.97%

Earnings & Valuation

This table compares NewtekOne and U.S. Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$237.74 million	1.19	$47.33 million	$1.95	5.54
U.S. Bancorp	$27.58 billion	2.27	$6.30 billion	$4.04	9.94

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

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 7.0%. U.S. Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 5.0%. NewtekOne pays out 39.0% of its earnings in the form of a dividend. U.S. Bancorp pays out 49.5% 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. U.S. Bancorp has raised its dividend for 14 consecutive years. NewtekOne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for NewtekOne and U.S. Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	4	0	0	2.00
U.S. Bancorp	1	8	12	0	2.52

NewtekOne presently has a consensus target price of $14.50, indicating a potential upside of 34.26%. U.S. Bancorp has a consensus target price of $50.48, indicating a potential upside of 25.72%. Given NewtekOne’s higher possible upside, analysts clearly believe NewtekOne is more favorable than U.S. Bancorp.

Volatility and Risk

NewtekOne has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

38.3% of NewtekOne shares are held by institutional investors. Comparatively, 77.6% of U.S. Bancorp shares are held by institutional investors. 6.5% of NewtekOne shares are held by company insiders. Comparatively, 0.2% of U.S. Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

U.S. Bancorp beats NewtekOne on 9 of the 17 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

About U.S. Bancorp

U.S. Bancorp, a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. It operates through Wealth, Corporate, Commercial and Institutional Banking; Consumer and Business Banking; Payment Services; and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers. In addition, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. Further, it provides investment and insurance products to its customers principally within its domestic markets, as well as fund administration services to mutual and other funds. Additionally, the company provides corporate and purchasing card, and corporate trust services. Furthermore, it offers trust and investment management, merchant and ATM processing, mortgage banking, insurance, and brokerage and leasing services. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.