3 Stocks Pushing The Banking Industry Lower

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The Banking industry as a whole closed the day down 0.5% versus the S&P 500, which was down 0.7%. Laggards within the Banking industry included Broadway Financial ( BYFC), down 3.7%, Emclaire Financial ( EMCF), down 5.7%, DNB Financial ( DNBF), down 6.8%, Georgetown Bancorp ( GTWN), down 4.4% and United Security ( UBFO), down 1.5%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Royal Bank of Scotland Group (The ( RBS) is one of the companies that pushed the Banking industry lower today. Royal Bank of Scotland Group (The was down $0.22 (2.0%) to $11.02 on light volume. Throughout the day, 469,931 shares of Royal Bank of Scotland Group (The exchanged hands as compared to its average daily volume of 756,400 shares. The stock ranged in price between $11.01-$11.16 after having opened the day at $11.11 as compared to the previous trading day's close of $11.24.

The Royal Bank of Scotland Group plc, through its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. Royal Bank of Scotland Group (The has a market cap of $64.5 billion and is part of the financial sector. Shares are down 0.8% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Royal Bank of Scotland Group (The a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates Royal Bank of Scotland Group (The as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from TheStreet Ratings analysis on RBS go as follows:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Commercial Banks industry and the overall market, ROYAL BANK OF SCOTLAND GROUP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ROYAL BANK OF SCOTLAND GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ROYAL BANK OF SCOTLAND GROUP reported poor results of -$2.68 versus -$1.72 in the prior year. This year, the market expects an improvement in earnings ($57.08 versus -$2.68).
  • The gross profit margin for ROYAL BANK OF SCOTLAND GROUP is currently very high, coming in at 77.45%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.55% trails the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 194.1% when compared to the same quarter one year prior, rising from $720.15 million to $2,117.73 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

You can view the full analysis from the report here: Royal Bank of Scotland Group (The Ratings Report

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At the close, United Security ( UBFO) was down $0.08 (1.5%) to $5.52 on average volume. Throughout the day, 7,090 shares of United Security exchanged hands as compared to its average daily volume of 7,500 shares. The stock ranged in price between $5.50-$5.65 after having opened the day at $5.51 as compared to the previous trading day's close of $5.61.

United Security Bancshares operates as the bank holding company for United Security Bank that provides a range of commercial banking services primarily to the business and professional community, and individuals in California. United Security has a market cap of $85.8 million and is part of the financial sector. Shares are up 14.0% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates United Security as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on UBFO go as follows:

  • UBFO's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, UBFO's share price has jumped by 36.90%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UBFO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 2120.19% to $2.10 million when compared to the same quarter last year. In addition, UNITED SECURITY BANCSHARS CA has also vastly surpassed the industry average cash flow growth rate of -42.09%.
  • The gross profit margin for UNITED SECURITY BANCSHARS CA is currently very high, coming in at 95.76%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, UBFO's net profit margin of 13.95% significantly trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, UNITED SECURITY BANCSHARS CA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

You can view the full analysis from the report here: United Security Ratings Report

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DNB Financial ( DNBF) was another company that pushed the Banking industry lower today. DNB Financial was down $1.55 (6.8%) to $21.20 on light volume. Throughout the day, 100 shares of DNB Financial exchanged hands as compared to its average daily volume of 1,200 shares. The stock ranged in price between $21.20-$21.20 after having opened the day at $21.20 as compared to the previous trading day's close of $22.75.

DNB Financial Corporation operates as the bank holding company for DNB First, National Association that provides a range of commercial banking products and services to individuals and small to medium sized businesses in southeastern Pennsylvania. DNB Financial has a market cap of $58.2 million and is part of the financial sector. Shares are up 9.6% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates DNB Financial a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates DNB Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from TheStreet Ratings analysis on DNBF go as follows:

  • DNBF's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, DNBF's share price has jumped by 31.50%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DNBF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has slightly increased to $1.89 million or 4.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -42.09%.
  • The gross profit margin for DNB FINANCIAL CORP is currently very high, coming in at 85.76%. Regardless of DNBF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DNBF's net profit margin of 14.29% is significantly lower than the industry average.
  • DNB FINANCIAL CORP's earnings per share declined by 14.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, DNB FINANCIAL CORP reported lower earnings of $1.36 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $1.36).

You can view the full analysis from the report here: DNB Financial Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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