Cadence Bancorporation (NYSE:CADE) and The First Bancshares (NASDAQ:FBMS) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Cadence Bancorporation and The First Bancshares, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Cadence Bancorporation | 0 | 2 | 4 | 1 | 2.86 |
| The First Bancshares | 0 | 0 | 2 | 0 | 3.00 |
Cadence Bancorporation currently has a consensus price target of $14.6667, suggesting a potential downside of 31.72%. Given Cadence Bancorporation's higher possible upside, equities analysts plainly believe Cadence Bancorporation is more favorable than The First Bancshares.
Profitability
This table compares Cadence Bancorporation and The First Bancshares' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Cadence Bancorporation | -40.33% | 2.70% | 0.33% |
| The First Bancshares | 23.05% | 7.70% | 1.00% |
Dividends
Cadence Bancorporation pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. The First Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 1.4%. Cadence Bancorporation pays out 34.9% of its earnings in the form of a dividend. The First Bancshares pays out 18.6% 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 Bancorporation has raised its dividend for 1 consecutive years and The First Bancshares has raised its dividend for 2 consecutive years.
Institutional and Insider Ownership
90.1% of Cadence Bancorporation shares are held by institutional investors. Comparatively, 51.9% of The First Bancshares shares are held by institutional investors. 3.0% of Cadence Bancorporation shares are held by company insiders. Comparatively, 4.3% of The First Bancshares shares are held 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.
Valuation and Earnings
This table compares Cadence Bancorporation and The First Bancshares' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Cadence Bancorporation | $991 million | 2.70 | $201.96 million | $1.72 | 12.49 |
| The First Bancshares | $175.48 million | 4.52 | $43.74 million | $2.79 | 13.53 |
Cadence Bancorporation has higher revenue and earnings than The First Bancshares. Cadence Bancorporation is trading at a lower price-to-earnings ratio than The First Bancshares, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Cadence Bancorporation has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, The First Bancshares has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.
Summary
The First Bancshares beats Cadence Bancorporation on 10 of the 18 factors compared between the two stocks.
