National Bank (NYSE:NBHC) and Cullen/Frost Bankers (NYSE:CFR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.
Institutional and Insider Ownership
Get National Bank alerts:91.8% of National Bank shares are held by institutional investors. Comparatively, 80.5% of Cullen/Frost Bankers shares are held by institutional investors. 6.4% of National Bank shares are held by insiders. Comparatively, 4.6% of Cullen/Frost Bankers shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations and price targets for National Bank and Cullen/Frost Bankers, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Bank | 0 | 3 | 1 | 0 | 2.25 |
| Cullen/Frost Bankers | 3 | 5 | 2 | 0 | 1.90 |
National Bank presently has a consensus price target of $38.25, indicating a potential upside of 7.44%. Cullen/Frost Bankers has a consensus price target of $108.63, indicating a potential upside of 3.18%. Given National Bank’s stronger consensus rating and higher probable upside, equities research analysts clearly believe National Bank is more favorable than Cullen/Frost Bankers.
Valuation & Earnings
This table compares National Bank and Cullen/Frost Bankers’ gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Bank | $292.17 million | 3.75 | $61.45 million | $2.16 | 16.48 |
| Cullen/Frost Bankers | $1.40 billion | 4.73 | $454.91 million | $6.90 | 15.26 |
Cullen/Frost Bankers has higher revenue and earnings than National Bank. Cullen/Frost Bankers is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
National Bank pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. Cullen/Frost Bankers pays an annual dividend of $2.68 per share and has a dividend yield of 2.5%. National Bank pays out 31.5% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 38.8% 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. National Bank has raised its dividend for 3 consecutive years and Cullen/Frost Bankers has raised its dividend for 26 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
National Bank has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.
Profitability
This table compares National Bank and Cullen/Frost Bankers’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Bank | 21.03% | 10.14% | 1.20% |
| Cullen/Frost Bankers | 32.44% | 14.38% | 1.45% |
Summary
Cullen/Frost Bankers beats National Bank on 11 of the 17 factors compared between the two stocks.
National Bank Company Profile
National Bank Holdings Corporation operates as the bank holding company for NBH Bank, N.A. that provides various banking products and financial services to commercial, business, and consumer clients in the United States. The company offers deposit products, including checking accounts, savings accounts, money market accounts, and other deposit accounts, including fixed-rate and fixed maturity time deposits. It also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases. The company also offers non-owner occupied commercial real estate loans consisting of loans on multi-family construction properties; commercial properties, such as office buildings, retail centers, or free-standing commercial properties; and multi-family and investor properties, as well as raw land development loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. As of December 31, 2017, the company operated through a network of 85 banking centers located in Colorado, the greater Kansas City area, New Mexico, and Texas. It also operates 106 ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. National Bank Holdings Corporation was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.
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.
No comments:
Post a Comment