Renasant Corporation (NASDAQ: RNST) and Carolina Financial Corporation (NASDAQ:CARO) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitabiliy, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Renasant Corporation and Carolina Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Renasant Corporation 20.31% 8.41% 1.17%
Carolina Financial Corporation 24.19% 13.40% 1.44%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Renasant Corporation and Carolina Financial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Renasant Corporation 0 2 1 0 2.33
Carolina Financial Corporation 0 1 3 1 3.00

Renasant Corporation presently has a consensus target price of $41.67, indicating a potential upside of 0.23%. Carolina Financial Corporation has a consensus target price of $36.67, indicating a potential upside of 9.49%. Given Carolina Financial Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Carolina Financial Corporation is more favorable than Renasant Corporation.

Institutional and Insider Ownership

66.7% of Renasant Corporation shares are held by institutional investors. Comparatively, 37.8% of Carolina Financial Corporation shares are held by institutional investors. 3.9% of Renasant Corporation shares are held by insiders. Comparatively, 12.2% of Carolina Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Renasant Corporation and Carolina Financial Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Renasant Corporation $434.66 million 4.25 $98.19 million $2.21 18.81
Carolina Financial Corporation $96.62 million 5.56 $29.06 million $1.81 18.50

Renasant Corporation has higher revenue and earnings than Carolina Financial Corporation. Carolina Financial Corporation is trading at a lower price-to-earnings ratio than Renasant Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Renasant Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. Carolina Financial Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Renasant Corporation pays out 32.6% of its earnings in the form of a dividend. Carolina Financial Corporation pays out 8.8% 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.

Volatility & Risk

Renasant Corporation has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Carolina Financial Corporation has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Summary

Carolina Financial Corporation beats Renasant Corporation on 10 of the 17 factors compared between the two stocks.

About Renasant Corporation

Renasant Corporation is a bank holding company that owns and operates Renasant Bank (the Bank) and Renasant Insurance, Inc. (Renasant Insurance). The Company’s segments include Community Banks, which delivers a range of banking and financial services to individuals and small to medium-sized businesses, including checking and savings accounts, business and personal loans, equipment leasing, as well as safe deposit and night depository facilities; Insurance, which includes a full service insurance agency offering all lines of commercial and personal insurance through major carriers; Wealth Management, which offers a range of fiduciary services that includes the administration and management of trust accounts, including personal and corporate benefit accounts, and custodial accounts, and Other. The Bank has its operations in Mississippi, Tennessee, Alabama, Florida and Georgia. Renasant Insurance has its operations in Mississippi. Renasant Insurance is a subsidiary of the Bank.

About Carolina Financial Corporation

Carolina Financial Corporation is a bank holding company. The Company operates through CresCom Bank (the Bank), a state-chartered commercial bank. The Company operates through three segments: community banking, wholesale mortgage banking (mortgage banking) and other. The Company’s community banking segment provides traditional banking services offered through CresCom Bank. The Company’s mortgage banking segment provides mortgage loan origination and servicing offered through Crescent Mortgage Company (Crescent Mortgage). The other segment provides managerial and operational support to the other business segments through Carolina Services and Carolina Financial. CresCom Bank provides a range of commercial and retail banking financial services to meet the financial needs of its customers through its branch network in South Carolina and North Carolina.

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