Pinnacle Financial Partners (NASDAQ:PNFP – Get a rating) and Webster Financial (New York Stock Exchange: WBS – Get a rating) are both mid-cap financials, but which stock is superior? We’ll compare the two companies based on valuation strength, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.
Pinnacle Financial Partners pays an annual dividend of $0.88 per share and has a dividend yield of 1.2%. Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 3.4%. Pinnacle Financial Partners pays 12.9% of its earnings as a dividend. Webster Financial pays 51.6% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Pinnacle Financial Partners has increased its dividend for 2 consecutive years.
Risk and Volatility
Pinnacle Financial Partners has a beta of 1.2, suggesting its stock price is 20% more volatile than the S&P 500. In comparison, Webster Financial has a beta of 1.28, suggesting its stock price is 28 % more volatile than the S&P 500.
This is a summary of the current ratings and price targets for Pinnacle Financial Partners and Webster Financial, as provided by MarketBeat.com.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Pinnacle Financial Partners||0||1||5||0||2.83|
Pinnacle Financial Partners currently has a consensus price target of $110.80, suggesting a potential upside of 45.92%. Webster Financial has a consensus price target of $66.60, suggesting a potential upside of 42.06%. Given Pinnacle Financial Partners’ likely higher upside, analysts clearly believe Pinnacle Financial Partners is more favorable than Webster Financial.
Benefits and evaluation
This table compares the revenue, earnings per share and valuation of Pinnacle Financial Partners and Webster Financial.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Pinnacle Financial Partners||$1.43 billion||4.06||$527.32 million||$6.80||11.17|
|Webster Financial||$1.27 billion||6.65||$408.86 million||$3.10||15.12|
Pinnacle Financial Partners has higher revenues and profits than Webster Financial. Pinnacle Financial Partners trades at a lower price-to-earnings ratio than Webster Financial, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
80.4% of Pinnacle Financial Partners shares are held by institutional investors. By comparison, 46.0% of Webster Financial’s shares are held by institutional investors. 2.1% of Pinnacle Financial Partners shares are held by insiders of the company. By comparison, 1.9% of Webster Financial’s stock is held by insiders of the company. Strong institutional ownership is an indication that endowments, large fund managers, and hedge funds believe a company will outperform the market over the long term.
This table compares the net margins, return on equity and return on assets of Pinnacle Financial Partners and Webster Financial.
|Net margins||Return on equity||return on assets|
|Pinnacle Financial Partners||36.76%||10.59%||1.42%|
Pinnacle Financial Partners beats Webster Financial on 11 of 17 factors compared between the two stocks.
About Pinnacle Financial Partners (Get a rating)
Pinnacle Financial Partners, Inc., together with its subsidiaries, operates as a bank holding company for Pinnacle Bank which provides various banking products and services in the United States. The Company accepts various deposits, including savings, checks, interest-free and interest-bearing checks, money market, and certificates of deposit accounts. Its lending products include commercial loans, such as equipment and working capital loans; commercial real estate loans comprising investment properties and commercial loans secured by real estate; and retail loans consisting of secured and unsecured term and installment loans, lines of credit, residential first mortgages, home equity loans and lines of credit, and cards credit for consumers and businesses. The company also offers various securities and other financial products; investment products; investment brokerage and advisory programs; and trust and investment management services, such as personal trusts, endowments, foundations, individual retirement accounts, pensions and custody. In addition, it provides insurance agency services primarily in the area of property and casualty; merger and acquisition advisory services; and private debt, equity and mezzanine, and other middle market advisory services. In addition, the Company offers cash management, telephone and online banking, mobile banking, debit cards, direct deposit and remote deposit, mobile deposit option, ATM automatic and cash management. It is aimed at individuals, small and medium-sized businesses and professionals. As of December 31, 2020, the company operated 114 offices, including 48 in Tennessee, 36 in North Carolina, 20 in South Carolina, 9 in Virginia and 1 in Georgia. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.
About Webster Financial (Get a rating)
Webster Financial Corporation operates as a bank holding company for Webster Bank, National Association which provides a range of banking, investment and financial services to individuals, families and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank and Retail Banking. The Commercial Banking segment provides lending, depository and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing and asset-based lending, and treasury and payment services; wealth management solutions for business owners, operators and consumers; and trust, asset management, financial planning, insurance, retirement and investment products. The HSA Bank segment offers health savings accounts, healthcare reimbursement arrangements, flexible spending accounts and commuter services that are distributed directly to employers and individual consumers, as well as through companies national and regional insurance companies, consultants and financial advisors. The Retail Banking segment offers deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans and consumer credit cards. The company also offers online and mobile banking services. As of December 31, 2021, it operated 130 banking centers and 251 ATMs. The company was founded in 1935 and is based in Stamford, Connecticut.
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