Hilltop (HTH) vs. Its Peers Critical Survey

Hilltop (NYSE:HTH) is one of 919 publicly-traded companies in the “Banks” industry, but how does it compare to its peers? We will compare Hilltop to similar companies based on the strength of its analyst recommendations, dividends, profitability, risk, institutional ownership, earnings and valuation.

Volatility & Risk

Hilltop has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Hilltop’s peers have a beta of 0.61, indicating that their average stock price is 39% less volatile than the S&P 500.

Profitability

This table compares Hilltop and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	9.08%	6.51%	0.88%
Hilltop Competitors	15.63%	9.41%	0.93%

Dividends

Hilltop pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Hilltop pays out 36.7% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 8.9% and pay out 28.9% of their earnings in the form of a dividend. Hilltop has raised its dividend for 8 consecutive years. Hilltop lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Hilltop and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Hilltop	$1.20 billion	$165.59 million	15.16
Hilltop Competitors	$223.74 billion	$2.42 billion	21.42

Hilltop’s peers have higher revenue and earnings than Hilltop. Hilltop is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for Hilltop and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	1	3	1	0	2.00
Hilltop Competitors	7494	30253	27860	1490	2.35

Hilltop currently has a consensus price target of $39.00, indicating a potential upside of 7.20%. As a group, “Banks” companies have a potential upside of 14.41%. Given Hilltop’s peers stronger consensus rating and higher probable upside, analysts clearly believe Hilltop has less favorable growth aspects than its peers.

Institutional and Insider Ownership

57.1% of Hilltop shares are owned by institutional investors. Comparatively, 48.0% of shares of all “Banks” companies are owned by institutional investors. 5.4% of Hilltop shares are owned by company insiders. Comparatively, 9.7% of shares of all “Banks” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Hilltop peers beat Hilltop on 13 of the 15 factors compared.

About Hilltop

Hilltop Holdings Inc. is a Dallas-based financial holding company with businesses in banking, mortgage lending and securities. Its operations primarily serve customers in Texas and other U.S. markets. Through PlainsCapital Bank, Hilltop provides commercial and consumer banking services, including deposit accounts, loans and treasury management. PrimeLending originates residential mortgages, while HilltopSecurities offers investment banking, municipal finance, brokerage and wealth management services.