Critical Contrast: Ally Financial (ALLY) & Its Peers

Ally Financial (NYSE: ALLY) is one of 29 publicly-traded companies in the “Nondepository credit institutions” industry, but how does it compare to its rivals? We will compare Ally Financial to related businesses based on the strength of its risk, valuation, earnings, profitability, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

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This is a breakdown of recent ratings and price targets for Ally Financial and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ally Financial 0 4 13 0 2.76
Ally Financial Competitors 161 724 970 41 2.47

Ally Financial presently has a consensus target price of $32.94, indicating a potential upside of 18.99%. As a group, “Nondepository credit institutions” companies have a potential downside of 5.63%. Given Ally Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ally Financial is more favorable than its rivals.

Dividends

Ally Financial pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. Ally Financial pays out 21.8% of its earnings in the form of a dividend. As a group, “Nondepository credit institutions” companies pay a dividend yield of 2.6% and pay out 35.6% of their earnings in the form of a dividend.

Institutional and Insider Ownership

50.6% of shares of all “Nondepository credit institutions” companies are owned by institutional investors. 0.2% of Ally Financial shares are owned by insiders. Comparatively, 19.3% of shares of all “Nondepository credit institutions” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ally Financial and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ally Financial 13.73% 8.10% 0.66%
Ally Financial Competitors 15.26% 65.14% 1.60%

Earnings and Valuation

This table compares Ally Financial and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Ally Financial $9.87 billion $929.00 million 11.58
Ally Financial Competitors $6.70 billion $705.01 million 12.21

Ally Financial has higher revenue and earnings than its rivals. Ally Financial is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Ally Financial has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Ally Financial’s rivals have a beta of 1.49, meaning that their average stock price is 49% more volatile than the S&P 500.

Summary

Ally Financial rivals beat Ally Financial on 9 of the 15 factors compared.

About Ally Financial

Ally Financial Inc. provides various financial products and services for consumers, businesses, automotive dealers, and corporate clients in the United States and Canada. The company operates Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment provides automotive financing services to consumers and automotive dealers. Its automotive finance services include providing retail installment sales contracts, loans and leases, term loans to dealers, financing dealer floorplans, other lines of credit to dealers, warehouse lines to companies, and fleet financing. This segment also offers financing services to companies and municipalities for the purchase or lease of vehicles and equipment, 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. The Mortgage Finance Operations segment manages held-for-investment consumer mortgage finance loan portfolio that includes bulk purchases of high-quality jumbo and LMI 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. Its primary focus is on businesses owned by private equity sponsors with loans used for leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital. The company, through its subsidiary, Ally Bank, also offers commercial banking products and services. In addition, it provides digital wealth management and online brokerage platform 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 headquartered in Detroit, Michigan.

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