Zions Bancorporation National Association (ZION) and Vonage Holdings Corp. (VG) both have caught the attention of the investment community that recently hit new highs. Naturally, this has caught the attention of the investment community. But which is the better investment? To answer this question, we will compare the two companies across various metrics including growth, profitability, risk, return, dividends, and valuation.
The company has grown sales at a 7.70% annual rate over the past five years, putting it in the medium growth category. ZION has a net profit margin of 31.20% and is more profitable than the average company in the Banks – Regional industry. This figure represents the amount of revenue a company generates per dollar of assets. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 11.80%, which is better than the Banks – Regional industry average ROE.
Zions Bancorporation National Association (ZION) pays out an annual dividend of 1.36 per share. At the current valuation, this equates to a dividend yield of 4.43%. The company has a payout ratio of 27.40%. ZION’s current dividend therefore should be sustainable. All else equal, companies with higher FCF yields are viewed as cheaper. Company trades at a P/E ratio of 9.72, and is more expensive than the average stock in the Banks – Regional industry. The average investment recommendation for ZION, taken from a group of Wall Street Analysts, is 2.70, or a Moderate Sell.
Over the past six months, Zions Bancorporation National Association insiders have been net sellers, acquiring a net of 350656.0 shares. This implies that insiders have been feeling relatively bullish about the outlook for ZION. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. ZION has a beta of 1.68 and therefore an above average level of market volatility.
Vonage Holdings Corp. (NASDAQ:VG) operates in the Telecom Services segment of the Communication Services sector. VG has increased sales at a 6.50% CAGR over the past five years, and is considered a medium growth stock. The company has a net profit margin of -1.60% and is less profitable than the average Telecom Services player. VG’s asset turnover ratio is 0.88 and the company has financial leverage of 1.41. Company is therefore mostly financed by equity capital. VG’s return on equity of -3.60% is worse than the Telecom Services industry average.
The company trades at a free cash flow yield of 1.4. The average analyst recommendation for VG is 1.60, or a Strong Sell.
Vonage Holdings Corp. insiders have bought a net of 3.46 million shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, VG’s beta of 0.49 indicates that the stock has an below average level of market risk.
VG has the better fundamentals, scoring higher on leverage metrics. VG has better insider activity and sentiment signals.
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May 05, 2020 at 07:40PM
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Zions Bancorporation National Association (ZION) vs. Vonage Holdings Corp. (VG)?: Which Should You Choose? - Weekly Oracle
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