KBC Group (OTCMKTS:KBCSY) & Amalgamated Financial (NASDAQ:AMAL) Critical Review

Amalgamated Financial (NASDAQ:AMAL) and KBC Group (OTCMKTS:KBCSY) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Amalgamated Financial and KBC Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amalgamated Financial	0	2	3	0	2.60
KBC Group	1	4	2	0	2.14

Amalgamated Financial currently has a consensus price target of $54.00, suggesting a potential upside of 12.59%. Given Amalgamated Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Amalgamated Financial is more favorable than KBC Group.

Risk and Volatility

Amalgamated Financial has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, KBC Group has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Valuation and Earnings

This table compares Amalgamated Financial and KBC Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amalgamated Financial	$453.17 million	3.16	$104.45 million	$3.75	12.79
KBC Group	$26.56 billion	2.03	$4.04 billion	$5.26	12.29

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amalgamated Financial	23.34%	14.30%	1.27%
KBC Group	15.58%	13.42%	0.94%

Dividends

Amalgamated Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. KBC Group pays an annual dividend of $0.66 per share and has a dividend yield of 1.0%. Amalgamated Financial pays out 18.1% of its earnings in the form of a dividend. KBC Group pays out 12.5% 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. Amalgamated Financial has increased its dividend for 4 consecutive years. Amalgamated Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

75.9% of Amalgamated Financial shares are owned by institutional investors. 1.6% of Amalgamated Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Amalgamated Financial beats KBC Group on 13 of the 17 factors compared between the two stocks.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.

About KBC Group

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.