Comparing Cadence Bancorp (CADE) & Pinnacle Financial Partners (PNFP)

Cadence Bancorp (NYSE:CADE) and Pinnacle Financial Partners (NASDAQ:PNFP) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Risk and Volatility

Cadence Bancorp has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares Cadence Bancorp and Pinnacle Financial Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cadence Bancorp 27.38% 12.68% 1.52%
Pinnacle Financial Partners 31.32% 9.51% 1.52%

Earnings & Valuation

This table compares Cadence Bancorp and Pinnacle Financial Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Bancorp $607.30 million 2.59 $166.26 million $2.07 9.42
Pinnacle Financial Partners $1.15 billion 3.81 $359.44 million $4.74 11.88

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

Institutional and Insider Ownership

81.5% of Pinnacle Financial Partners shares are held by institutional investors. 0.1% of Cadence Bancorp shares are held by company insiders. Comparatively, 3.0% of Pinnacle Financial Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Cadence Bancorp pays an annual dividend of $0.70 per share and has a dividend yield of 3.6%. Pinnacle Financial Partners pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Cadence Bancorp pays out 33.8% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 13.5% 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cadence Bancorp and Pinnacle Financial Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Bancorp 0 2 5 1 2.88
Pinnacle Financial Partners 0 1 6 0 2.86

Cadence Bancorp presently has a consensus price target of $25.63, suggesting a potential upside of 31.41%. Pinnacle Financial Partners has a consensus price target of $63.67, suggesting a potential upside of 13.02%. Given Cadence Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Cadence Bancorp is more favorable than Pinnacle Financial Partners.

Summary

Pinnacle Financial Partners beats Cadence Bancorp on 10 of the 16 factors compared between the two stocks.

Cadence Bancorp Company Profile

Cadence Bancorporation, a financial holding company, through its subsidiary, Cadence Bank, National Association, provides commercial banking products and services to middle-market commercial businesses, high net worth individuals, business owners, and retail customers in the United States. The company operates through Banking and Financial Services segments. It offers checking, savings, money market, and other deposit accounts. The company also provides commercial and industrial, and commercial and residential real estate loans; other consumer loans, such as home equity, auto, boat, and personal installment loans; and shared national credits. In addition, it offers wealth management and other fiduciary, and private banking services under the Linscomb & Williams and Cadence Trust brands. Further, the company provides life, disability, and long-term care insurance products, as well as buy-sell agreements to retail and commercial customers under the Cadence Investment Services brand through financial consultants and advisors, and third party partners, as well as directly. Additionally, it offers correspondent banking products and services comprising treasury and liquidity management, Fed funds accommodation, wholesale mortgage, and commercial real estate participation services for financial institutions; and payroll and human resources services, payroll cards, and employee health insurance products. The company also provides debit and credit cards; treasury management and merchant services; employee and payroll benefit solutions; and automated clearing house, lock-box, remote deposit capture, foreign exchange, and other treasury services, as well as online, mobile, and telephone banking services. As of December 31, 2018, it operated 66 branch offices in Texas, Alabama, Florida, Mississippi, and Tennessee; and 32 branches throughout Georgia. The company also serves through ATMs and ITMs. Cadence Bancorporation was founded in 1885 and is headquartered in Houston, Texas.

Pinnacle Financial Partners Company Profile

Pinnacle Financial Partners, Inc. operates as a bank holding company for Pinnacle Bank that provides various banking products and services in the United States. The company accepts various deposits, including savings, checking, interest-bearing checking, money market, and certificate of deposit accounts. Its loan products include commercial loans, such as equipment and working capital loans; commercial real estate loans comprising investment properties and business loans secured by real estate; and loans to individuals consisting of secured and unsecured installment and term loans, lines of credit, residential first mortgage loans, and home equity loans and lines of credit. The company also offers various securities and other financial products; investment products; brokerage and investment advisory programs; and fiduciary and investment management services, such as personal trust, endowments, foundations, individual retirement accounts, pensions, and custody. In addition, it provides insurance products primarily in the property and casualty area; merger and acquisition advisory services; and private debt, equity and mezzanine, interest rate derivatives, and other middle-market advisory services. Further, the company offers treasury management, telephone and online banking, mobile banking, debit and credit cards, direct and remote deposit, automated teller machine, and cash management services. It serves individuals, small-to medium-sized businesses, and professional entities. As of December 31, 2018, the company operates 114 offices, including 47 in Tennessee, 38 in North Carolina, 21 in South Carolina, and 8 in Virginia. Pinnacle Financial Partners, Inc. was founded in 2000 and is headquartered in Nashville, Tennessee.

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