Dacotah Banks (OTCMKTS:DBIN) versus Ally Financial (NYSE:ALLY) Critical Survey

Dacotah Banks (OTCMKTS:DBIN) and Ally Financial (NYSE:ALLY) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility & Risk

Dacotah Banks has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Ally Financial has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Institutional and Insider Ownership

88.8% of Ally Financial shares are owned by institutional investors. 0.7% of Ally Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Dacotah Banks and Ally Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dacotah Banks	0	0	0	0	0.00
Ally Financial	1	9	9	0	2.42

Ally Financial has a consensus price target of $43.76, suggesting a potential upside of 18.96%. Given Ally Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Ally Financial is more favorable than Dacotah Banks.

Profitability

This table compares Dacotah Banks and Ally Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dacotah Banks	11.04%	N/A	N/A
Ally Financial	11.29%	9.31%	0.57%

Earnings & Valuation

This table compares Dacotah Banks 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
Dacotah Banks	$199.04 million	1.90	$26.17 million	$2.39	14.23
Ally Financial	$8.18 billion	1.38	$668.00 million	$2.60	14.15

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

Dividends

Dacotah Banks pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Ally Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.3%. Dacotah Banks pays out 25.1% of its earnings in the form of a dividend. Ally Financial pays out 46.2% 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.

Summary

Ally Financial beats Dacotah Banks on 13 of the 16 factors compared between the two stocks.

About Dacotah Banks

Dacotah Banks, Inc. provides various banking and financial products and services to individuals and businesses. The company provides demand and certificates of deposit; checking, individual retirement, health savings, and money market accounts; and commercial, commercial real estate, residential mortgage, and consumer loans. It also offers vehicle, boat, motorhome, mortgage, camper, motorcycle, snowmobile, jet SKI, and ATV loans; and unsecured, overdraft protection, and student loans; business, term, and small business administration loans, and other loans. In addition, the company provides credit, debit, and gift cards; mobile and online banking; auto, homeowner, health, and life insurance products; and estate, and trust services. Further, the company offers retirement planning, investment management, foundation, endowment, bill paying, charitable giving, and elder care services, as well as cash management services. Additionally, it provides offers operating lines of credit, state and federal programs, and equipment loans and leases. It also provides crop, homeowner, health, life, farm, and ranch insurance services; and farm and ranch management services. The company operates across various locations in Minnesota, North Dakota, and South Dakota. Dacotah Banks, Inc. was founded in 1955 and is headquartered in Aberdeen, South Dakota.

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.