Enterprise Financial Services (NASDAQ:EFSC) and Central Pacific Financial (NYSE:CPF) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Institutional & Insider Ownership
76.3% of Enterprise Financial Services shares are held by institutional investors. Comparatively, 92.2% of Central Pacific Financial shares are held by institutional investors. 2.6% of Enterprise Financial Services shares are held by company insiders. Comparatively, 4.3% of Central Pacific Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Enterprise Financial Services pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Central Pacific Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Enterprise Financial Services pays out 18.6% of its earnings in the form of a dividend. Central Pacific Financial pays out 52.8% 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. Enterprise Financial Services has raised its dividend for 3 consecutive years.
Earnings and Valuation
This table compares Enterprise Financial Services and Central Pacific Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Enterprise Financial Services||$236.93 million||4.82||$48.19 million||$2.58||19.12|
|Central Pacific Financial||$219.06 million||3.41||$41.20 million||$1.59||15.99|
Enterprise Financial Services has higher revenue and earnings than Central Pacific Financial. Central Pacific Financial is trading at a lower price-to-earnings ratio than Enterprise Financial Services, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Enterprise Financial Services has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Central Pacific Financial has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.
This table compares Enterprise Financial Services and Central Pacific Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enterprise Financial Services||25.87%||13.30%||1.38%|
|Central Pacific Financial||19.71%||10.54%||0.92%|
This is a breakdown of current ratings and recommmendations for Enterprise Financial Services and Central Pacific Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enterprise Financial Services||0||1||1||0||2.50|
|Central Pacific Financial||0||0||0||0||N/A|
Enterprise Financial Services presently has a consensus target price of $57.25, indicating a potential upside of 16.03%. Given Enterprise Financial Services’ higher probable upside, analysts clearly believe Enterprise Financial Services is more favorable than Central Pacific Financial.
Enterprise Financial Services beats Central Pacific Financial on 12 of the 16 factors compared between the two stocks.
About Enterprise Financial Services
Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers. The company offers demand deposits, interest-bearing transaction accounts, money market accounts, and savings deposits, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, commercial real estate, real estate construction and development, residential real estate, and consumer loans. In addition, the company provides treasury management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and sale of these tax credits to clients; and financial and estate planning, investment management, trust, fiduciary, and financial advisory services to businesses, individuals, institutions, retirement plans, and non-profit organizations. As of December 31, 2017, it had 19 banking locations and 5 limited service facilities in the St. Louis metropolitan area; 7 banking locations in the Kansas City metropolitan area; and 2 banking locations in the Phoenix metropolitan area. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
About Central Pacific Financial
Central Pacific Financial Corp. operates as the holding company for Central Pacific Bank that provides commercial banking products and services to businesses, professionals, and individuals in Hawaii. The company operates in three segments: Banking Operations, Treasury, and All Others. It offers various deposit products and services, including personal and business checking and savings accounts, money market accounts, and time certificates of deposit. The company's lending activities comprise commercial loans, commercial mortgages, construction loans, and leases to small and medium-sized companies, business professionals, and real estate investors and developers, as well as residential mortgages and consumer loans to local homebuyers and individuals. It also provides debit cards, Internet and mobile banking, cash management services, traveler's checks, safe deposit boxes, international banking services, night depository facilities, foreign exchange and wire transfers, trust services, retail brokerage, and wholesale funding services. In addition, the company offers wealth management products and services, including non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services. It operates 35 branches and 79 ATMs in the state of Hawaii. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.
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