Reviewing Mitsubishi UFJ Financial Group (NYSE:MUFG) and Hilltop (NYSE:HTH)

Hilltop (NYSE:HTH) and Mitsubishi UFJ Financial Group (NYSE:MUFG) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Valuation and Earnings

This table compares Hilltop and Mitsubishi UFJ Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilltop	$1.63 billion	1.34	$165.59 million	$2.70	14.12
Mitsubishi UFJ Financial Group	$7,863.01 billion	0.03	$11.41 billion	$1.53	15.01

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

Analyst Recommendations

This is a summary of recent ratings for Hilltop and Mitsubishi UFJ Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	3	1	1	2.60
Mitsubishi UFJ Financial Group	0	1	3	1	3.00

Hilltop presently has a consensus price target of $40.00, indicating a potential upside of 4.93%. Given Hilltop’s higher possible upside, research analysts plainly believe Hilltop is more favorable than Mitsubishi UFJ Financial Group.

Dividends

Hilltop pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Mitsubishi UFJ Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 2.2%. Hilltop pays out 32.6% of its earnings in the form of a dividend. Mitsubishi UFJ Financial Group pays out 32.7% 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. Hilltop has increased its dividend for 8 consecutive years. Hilltop is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Hilltop has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Mitsubishi UFJ Financial Group has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Profitability

This table compares Hilltop and Mitsubishi UFJ Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	10.17%	7.40%	1.02%
Mitsubishi UFJ Financial Group	17.63%	12.30%	0.66%

Insider & Institutional Ownership

57.1% of Hilltop shares are owned by institutional investors. Comparatively, 13.6% of Mitsubishi UFJ Financial Group shares are owned by institutional investors. 5.4% of Hilltop shares are owned by company insiders. Comparatively, 0.0% of Mitsubishi UFJ Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Hilltop beats Mitsubishi UFJ Financial Group on 10 of the 17 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. It operates through seven segments: Digital Service, Retail & Commercial Banking, Japanese Corporate & Investment Banking, Global Commercial Banking, Asset Management & Investor Services, Global Corporate & Investment Banking, and Global Markets. The company offers commercial banking, trust banking, and securities products and services to retail, and small and medium-sized enterprise customers. It also provides mergers and acquisition, debt and equity issuance, financial advice, and real estate-related services; digital-based financial services; credit cards; and trust banking and securities products and services, as well as engages in the lending, fund settlement, and foreign exchange businesses. In addition, the company offers corporate banking services, such as project export credit agency finance, and financing through asset-backed commercial paper; investment and transaction banking services for corporations, financial institutions, sovereign and multinational organizations, and institutional investors; and asset management and investor services, including pension fund management and administration, pension structure advisory, beneficiary payment, and investment trust services for retail customers. Further, it provides loans, deposits, fund transfers, hedging, and investments services for retail, small and medium-sized enterprise, as well as corporate customers; financing for automotive and consumer goods; sells and trades in fixed income instruments, currencies, equities, and equities; offers investment products comprising mutual funds, structured bonds, and notes; originates and distributes of financial products; and provides insurance and treasury services. The company was founded in 1880 and is headquartered in Tokyo, Japan.