NatWest Group (OTCMKTS:RBSPF) & Regions Financial (NYSE:RF) Critical Review

Regions Financial (NYSE:RF) and NatWest Group (OTCMKTS:RBSPF) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Regions Financial	23.33%	12.88%	1.42%
NatWest Group	20.10%	14.01%	0.82%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Regions Financial and NatWest Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	4	10	6	0	2.10
NatWest Group	0	0	1	0	3.00

Regions Financial currently has a consensus target price of $32.24, indicating a potential upside of 5.90%. Given Regions Financial’s higher probable upside, analysts clearly believe Regions Financial is more favorable than NatWest Group.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.70	$2.16 billion	$2.45	12.42
NatWest Group	$38.91 billion	1.92	$7.69 billion	$1.00	9.34

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

Institutional & Insider Ownership

79.4% of Regions Financial shares are held by institutional investors. 0.3% of Regions Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Regions Financial has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, NatWest Group has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Summary

Regions Financial beats NatWest Group on 10 of the 14 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

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.