Critical Comparison: Harleysville Financial (OTCMKTS:HARL) vs. Truist Financial (NYSE:TFC)

Harleysville Financial (OTCMKTS:HARL) and Truist Financial (NYSE:TFC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Dividends

Harleysville Financial pays an annual dividend of $1.24 per share and has a dividend yield of 5.5%. Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.4%. Harleysville Financial pays out 51.0% of its earnings in the form of a dividend. Truist Financial pays out -145.5% 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. Truist Financial has raised its dividend for 13 consecutive years.

Volatility and Risk

Harleysville Financial has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Truist Financial has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Harleysville Financial and Truist Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harleysville Financial	0	0	0	0	0.00
Truist Financial	0	11	11	0	2.50

Truist Financial has a consensus price target of $47.67, indicating a potential upside of 0.87%. Given Truist Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Truist Financial is more favorable than Harleysville Financial.

Profitability

This table compares Harleysville Financial and Truist Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harleysville Financial	22.05%	10.38%	1.03%
Truist Financial	-4.89%	9.35%	0.98%

Insider & Institutional Ownership

1.2% of Harleysville Financial shares are owned by institutional investors. Comparatively, 71.3% of Truist Financial shares are owned by institutional investors. 14.5% of Harleysville Financial shares are owned by insiders. Comparatively, 0.2% of Truist Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Harleysville Financial and Truist Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harleysville Financial	$40.39 million	2.02	$2.05 million	$2.43	9.24
Truist Financial	$33.25 billion	1.89	-$1.09 billion	($1.43)	-33.05

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

Summary

Harleysville Financial beats Truist Financial on 9 of the 17 factors compared between the two stocks.

About Harleysville Financial

Harleysville Financial Corporation operates as the bank holding company for Harleysville Bank that provides various banking products and services in Pennsylvania. The company offers various deposit products, including savings, money market, and checking accounts, as well as certificates of deposits. It also provides consumer loans, including residential mortgages, savings account loans, and home equity line of credit, construction, and non-real estate consumer loans; and commercial loans, such as commercial mortgages, line of credit, and commercial business loans. In addition, the company offers online banking and bill payment, mobile and telephone banking, remote deposit, debit cards, automated clearing house processing, sweep accounts, zero balance accounts, employee services, and other cash management services. Further, it provides investment services, such as financial consultation, cash and wealth management, education planning, investment strategy, insurance, retirement and estate planning, financial and goal planning, and asset allocation services, as well as offers investment products, such as fixed and variable annuities, mutual funds, life insurances, stocks and bonds, tax-advantaged investments, long-term care insurances, disability insurances, retirement plans/individual retirement accounts, wrap accounts, and unit investment trusts. Its primary market area includes Montgomery County and Bucks County. The company was formerly known as Harleysville Savings Financial Corporation and changed its name to Harleysville Financial Corporation in May 2017. Harleysville Financial Corporation was founded in 1915 and is headquartered in Harleysville, Pennsylvania.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.