PrivateBancorp (NASDAQ: PVTB) and Capstar Financial Holdings (NASDAQ:CSTR) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitabiliy and risk.

Dividends

PrivateBancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Capstar Financial Holdings does not pay a dividend. PrivateBancorp pays out 1.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for PrivateBancorp and Capstar Financial Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PrivateBancorp 0 3 0 0 2.00
Capstar Financial Holdings 0 4 1 0 2.20

PrivateBancorp presently has a consensus price target of $57.00, indicating a potential downside of 6.51%. Capstar Financial Holdings has a consensus price target of $20.33, indicating a potential upside of 12.03%. Given Capstar Financial Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Capstar Financial Holdings is more favorable than PrivateBancorp.

Valuation and Earnings

This table compares PrivateBancorp and Capstar Financial Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PrivateBancorp N/A N/A N/A $2.65 23.01
Capstar Financial Holdings $44.99 million 4.53 N/A N/A N/A

Profitability

This table compares PrivateBancorp and Capstar Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PrivateBancorp 29.22% 11.73% 1.15%
Capstar Financial Holdings N/A N/A N/A

Insider and Institutional Ownership

88.5% of PrivateBancorp shares are owned by institutional investors. Comparatively, 38.0% of Capstar Financial Holdings shares are owned by institutional investors. 3.9% of PrivateBancorp shares are owned by insiders. Comparatively, 19.3% of Capstar Financial Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Capstar Financial Holdings beats PrivateBancorp on 6 of the 11 factors compared between the two stocks.

PrivateBancorp Company Profile

PrivateBancorp, Inc. is a bank holding company for The PrivateBank and Trust Company (the Bank). Through the Bank, the Company provides customized business and personal financial services to middle market companies, as well as business owners, executives, entrepreneurs and families in the markets and communities it serves. The Company operates through three operating segments: Banking, Asset Management and Holding Company activities. The Banking segment consists of commercial and personal banking services. The Company’s Asset Management segment includes certain activities of its PrivateWealth group, including investment management, personal trust and estate administration, custodial and escrow services, investment management services for 401(k) plans and brokerage services. The activities of the Holding Company Activities segment include the direct and indirect ownership of its banking subsidiary, the issuance of debt and intersegment eliminations.

Capstar Financial Holdings Company Profile

CapStar Financial Holdings, Inc. is a bank holding company. The Company operates primarily through its subsidiary, CapStar Bank. CapStar Bank is a commercial bank. The Company’s lines of business include commercial and industrial, commercial real estate, healthcare, correspondent banking, personal and private banking and wealth management, and mortgage banking. Its products and services include commercial and industrial loans to small and medium sized businesses, with a particular focus on businesses operating in the healthcare industry; commercial real estate loans; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals, and correspondent banking services. As of June 30, 2016, the Company had seven locations, five of which are retail bank branches and two of which are mortgage origination offices.

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