Cullen/Frost Bankers (CFR) vs. Zions Bancorp (ZION) Critical Comparison

Cullen/Frost Bankers (NYSE:CFR) and Zions Bancorp (NASDAQ:ZION) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Dividends

Cullen/Frost Bankers pays an annual dividend of $2.68 per share and has a dividend yield of 2.7%. Zions Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Cullen/Frost Bankers pays out 49.2% of its earnings in the form of a dividend. Zions Bancorp pays out 42.0% 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. Cullen/Frost Bankers has raised its dividend for 25 consecutive years and Zions Bancorp has raised its dividend for 5 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

79.1% of Cullen/Frost Bankers shares are held by institutional investors. Comparatively, 94.8% of Zions Bancorp shares are held by institutional investors. 4.6% of Cullen/Frost Bankers shares are held by insiders. Comparatively, 1.6% of Zions Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Cullen/Frost Bankers and Zions Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cullen/Frost Bankers $1.23 billion 5.22 $364.14 million $5.45 18.41
Zions Bancorp $2.74 billion 3.46 $592.00 million $2.86 17.01

Zions Bancorp has higher revenue and earnings than Cullen/Frost Bankers. Zions Bancorp is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cullen/Frost Bankers and Zions Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cullen/Frost Bankers 32.11% 13.74% 1.38%
Zions Bancorp 26.57% 11.84% 1.26%

Risk and Volatility

Cullen/Frost Bankers has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Zions Bancorp has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cullen/Frost Bankers and Zions Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cullen/Frost Bankers 2 5 3 0 2.10
Zions Bancorp 0 8 12 0 2.60

Cullen/Frost Bankers presently has a consensus price target of $115.75, suggesting a potential upside of 15.35%. Zions Bancorp has a consensus price target of $58.55, suggesting a potential upside of 20.32%. Given Zions Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Zions Bancorp is more favorable than Cullen/Frost Bankers.

Summary

Cullen/Frost Bankers beats Zions Bancorp on 9 of the 17 factors compared between the two stocks.

Cullen/Frost Bankers Company Profile

Cullen/Frost Bankers, Inc. operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. The company operates in two segments, Banking and Frost Wealth Advisors. It provides commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction, equipment, inventories and accounts receivable, and acquisition financing; commercial leasing; and treasury management services. The company also offers consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. Its international banking services comprise accepting deposits, making loans, issuing letter of credits, handling foreign collections, transmitting funds, and dealing in foreign exchange. In addition, the company acts as correspondent for approximately 203 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services consisting of sales and trading, new issue underwriting, money market trading, advisory services, and securities safekeeping and clearance; and supports international business activities. Further, it offers insurance and securities brokerage services; holds securities for investment purposes; and provides loans to qualified borrowers, as well as offers investment management services to Frost-managed mutual funds, institutions, and individuals. The company operates approximately 134 financial centers and approximately 1,300 ATMs in Texas. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

Zions Bancorp Company Profile

Zions Bancorporation, National Association provides various banking and related services primarily in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The company offers community banking services, such as small and medium-sized business and corporate banking; commercial and residential development, construction, and term lending; retail banking; treasury cash management and related products and services; residential mortgage servicing and lending services; trust and wealth management services; capital markets services, including municipal finance advisory and underwriting; and investment services. It also offers personal banking services to individuals, including home mortgages, bankcards, other installment loans, home equity lines of credit, checking accounts, savings accounts, certificates of deposit of various types and maturities, trust services, safe deposit facilities, and Internet and mobile banking services. In addition, the company provides self-directed brokerage services; and small business administration lending and secondary market agricultural real estate mortgage loans; and bond transfer, stock transfer, and escrow services for corporate customers. As of December 31, 2017, it operated 433 domestic branches. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is based in Salt Lake City, Utah.

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