Comparing NewtekOne (NASDAQ:NEWT) & Banc of California (NYSE:BANC)

NewtekOne (NASDAQ:NEWT) and Banc of California (NYSE:BANC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Institutional and Insider Ownership

38.3% of NewtekOne shares are owned by institutional investors. Comparatively, 86.9% of Banc of California shares are owned by institutional investors. 6.4% of NewtekOne shares are owned by insiders. Comparatively, 7.4% of Banc of California shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares NewtekOne and Banc of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewtekOne	14.94%	18.99%	2.96%
Banc of California	-21.99%	2.12%	0.17%

Earnings and Valuation

This table compares NewtekOne and Banc of California”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$206.40 million	1.58	$47.33 million	$1.55	8.51
Banc of California	$429.87 million	5.48	-$1.90 billion	($3.33)	-4.50

NewtekOne has higher earnings, but lower revenue than Banc of California. Banc of California is trading at a lower price-to-earnings ratio than NewtekOne, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for NewtekOne and Banc of California, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	3	0	0	2.00
Banc of California	0	5	5	0	2.50

NewtekOne currently has a consensus price target of $12.33, suggesting a potential downside of 6.49%. Banc of California has a consensus price target of $16.45, suggesting a potential upside of 9.78%. Given Banc of California’s stronger consensus rating and higher probable upside, analysts plainly believe Banc of California is more favorable than NewtekOne.

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 5.8%. Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. NewtekOne pays out 49.0% of its earnings in the form of a dividend. Banc of California pays out -12.0% 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.

Volatility & Risk

NewtekOne has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Banc of California has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

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 Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.