Head to Head Survey: Ally Financial (NYSE:ALLY) and Atlantic Union Bankshares (NASDAQ:AUB)

Atlantic Union Bankshares (NASDAQ:AUB) and Ally Financial (NYSE:ALLY) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Atlantic Union Bankshares and Ally Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlantic Union Bankshares	0	1	4	0	2.80
Ally Financial	2	6	9	0	2.41

Atlantic Union Bankshares currently has a consensus price target of $40.40, suggesting a potential upside of 10.38%. Ally Financial has a consensus price target of $40.63, suggesting a potential upside of 15.05%. Given Ally Financial’s higher probable upside, analysts clearly believe Ally Financial is more favorable than Atlantic Union Bankshares.

Dividends

Atlantic Union Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 3.5%. Ally Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. Atlantic Union Bankshares pays out 47.1% of its earnings in the form of a dividend. Ally Financial pays out 49.0% 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. Atlantic Union Bankshares has increased its dividend for 13 consecutive years. Atlantic Union Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Atlantic Union Bankshares and Ally Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlantic Union Bankshares	$1.05 billion	3.14	$201.82 million	$2.72	13.46
Ally Financial	$8.83 billion	1.22	$1.02 billion	$2.45	14.41

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

Insider and Institutional Ownership

78.6% of Atlantic Union Bankshares shares are owned by institutional investors. Comparatively, 88.8% of Ally Financial shares are owned by institutional investors. 0.9% of Atlantic Union Bankshares shares are owned by insiders. Comparatively, 0.7% of Ally Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Atlantic Union Bankshares and Ally Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlantic Union Bankshares	15.53%	8.95%	1.07%
Ally Financial	10.26%	8.37%	0.48%

Volatility and Risk

Atlantic Union Bankshares has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Summary

Atlantic Union Bankshares beats Ally Financial on 10 of the 17 factors compared between the two stocks.

About Atlantic Union Bankshares

Atlantic Union Bankshares Corporation operates as the bank holding company for Atlantic Union Bank that provides banking and related financial products and services to consumers and businesses in the United States. It operates in two segments, Wholesale Banking and Consumer Banking. The company accepts various deposit products, including checking, savings, time deposit, and money market accounts; certificates of deposit; and other depository services. It also provides loans for commercial, industrial, residential mortgage, and consumer purposes, as well as debit and credit cards. In addition, it provides treasury management and capital market, wealth management, private banking, trust, financial and retirement planning, brokerage, investment management, equipment finance, mortgage banking, and insurance products and services. The company offers products and services through full-service branches and ATMs, as well as through its mobile and internet banking. The company was formerly known as Union Bankshares Corporation and changed its name to Atlantic Union Bankshares Corporation in May 2019. Atlantic Union Bankshares Corporation was founded in 1902 and is headquartered in Glen Allen, Virginia.

About Ally Financial

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services in the United States, Canada, and Bermuda. The company operates through Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers' vehicle inventory. The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies; leveraged loans; and commercial real estate product to serve companies in the nursing facilities, senior housing, and medical office buildings. It also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is based in Detroit, Michigan.