National Bank (NYSE: NBHC) and Cadence Bancorp (NYSE:CADE) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.
National Bank pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. Cadence Bancorp pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. National Bank pays out 69.2% of its earnings in the form of a dividend. Cadence Bancorp pays out 39.7% 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. Cadence Bancorp has raised its dividend for 2 consecutive years. Cadence Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares National Bank and Cadence Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings for National Bank and Cadence Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
National Bank currently has a consensus price target of $35.40, indicating a potential upside of 5.48%. Cadence Bancorp has a consensus price target of $26.86, indicating a potential downside of 5.93%. Given National Bank’s higher possible upside, research analysts clearly believe National Bank is more favorable than Cadence Bancorp.
Institutional & Insider Ownership
96.2% of National Bank shares are owned by institutional investors. Comparatively, 23.5% of Cadence Bancorp shares are owned by institutional investors. 7.6% of National Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares National Bank and Cadence Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|National Bank||$203.63 million||5.00||$14.57 million||$0.52||64.54|
|Cadence Bancorp||$430.78 million||5.54||$102.35 million||$1.26||22.66|
Cadence Bancorp has higher revenue and earnings than National Bank. Cadence Bancorp is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.
Cadence Bancorp beats National Bank on 12 of the 16 factors compared between the two stocks.
National Bank Company Profile
National Bank Holdings Corporation (NBH) is a bank holding company. Through Bank Midwest, N.A. (Bank Midwest), NBH’s primary business is to offer a range of products and financial services to both its commercial and consumer customers, located in Kansas, Missouri and Colorado. The Company offers an array of lending products to cater to the customers’ needs, including, but not limited to, small business loans, equipment loans, term loans, asset-backed loans, letters of credit, commercial lines of credit, residential mortgage loans, home equity and consumer loans. It also offers traditional depository products, including commercial and consumer checking accounts, non-interest-bearing demand accounts, money market deposit accounts, savings accounts and time deposit accounts and cash management services. As of December 31, 2011, it operated a network of 103 full-service banking centers, with the majority of those banking centers located in the Kansas City region and Colorado.
Cadence Bancorp Company Profile
Cadence Bancorporation is a bank holding company. The Company is focused on middle-market commercial lending, complemented by retail banking and wealth management services, and provides a broad range of banking services to businesses, individuals and business owners. It operates through three segments: Banking, Financial Services and Corporate. Banking Segment offers a range of deposit products and lending services through its Commercial Banking, Retail Banking and Private Banking business lines. Financial Services segment provides an integrated set of investment, retirement, estate, college and business succession planning, retail brokerage, personal and institutional trust services and insurance services through three product lines: Investment Management, Trust Services, and Insurance Services. The Corporate Segment reflects parent-only activities, including debt and capital raising, and intercompany eliminations.
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