Yadkin Financial Corp (NYSE: YDKN) and Texas Capital Bancshares (NASDAQ:TCBI) are both commercial banks companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Earnings and Valuation

This table compares Yadkin Financial Corp and Texas Capital Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Yadkin Financial Corp N/A N/A N/A $1.12 30.79
Texas Capital Bancshares $764.19 million 5.58 $155.11 million $3.85 22.32

Texas Capital Bancshares has higher revenue and earnings than Yadkin Financial Corp. Texas Capital Bancshares is trading at a lower price-to-earnings ratio than Yadkin Financial Corp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Yadkin Financial Corp and Texas Capital Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yadkin Financial Corp 0 0 0 0 N/A
Texas Capital Bancshares 0 10 5 0 2.33

Texas Capital Bancshares has a consensus price target of $89.57, suggesting a potential upside of 4.21%. Given Texas Capital Bancshares’ higher probable upside, analysts clearly believe Texas Capital Bancshares is more favorable than Yadkin Financial Corp.

Institutional & Insider Ownership

69.7% of Yadkin Financial Corp shares are held by institutional investors. Comparatively, 99.8% of Texas Capital Bancshares shares are held by institutional investors. 3.0% of Yadkin Financial Corp shares are held by company insiders. Comparatively, 0.5% of Texas Capital Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Yadkin Financial Corp and Texas Capital Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yadkin Financial Corp 18.40% 5.41% 0.75%
Texas Capital Bancshares 22.50% 10.40% 0.89%

Risk & Volatility

Yadkin Financial Corp has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Texas Capital Bancshares has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Summary

Texas Capital Bancshares beats Yadkin Financial Corp on 9 of the 10 factors compared between the two stocks.

About Yadkin Financial Corp

Yadkin Financial Corporation is a bank holding company. The Company conducts its business operations through its subsidiary, Yadkin Bank, which is a chartered community bank that provides services in approximately 110 branches across North Carolina and South Carolina. Yadkin Bank provides banking, mortgage, investment and insurance services to businesses and consumers across the Carolinas. It operates through a segment, which is providing general commercial banking and financial services to individuals and businesses located in North Carolina and South Carolina, and to customers in various states through its Small Business Administration (SBA) lending program. It offers various loans, such as commercial and industrial (C&I) loans and government-guaranteed loans. The Company’s investment securities portfolio includes the United States Government-sponsored enterprise (GSE) obligations and securities guaranteed by the United States SBA. The Company’s primary source of funds is deposits.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. is a bank holding and a financial holding company. The Company is the parent of Texas Capital Bank, National Association (the Bank). It offers a range of loan, deposit account and other financial products and services to its customers. It offers a range of products and services for its business customers, including commercial loans for general corporate purposes, including financing for working capital, internal growth, acquisitions and financing for business insurance premiums; medium- and long-term tax-exempt loans for municipalities and other governmental and tax-exempt entities; wealth management and trust services, and letters of credit. It also provides banking services for its individual customers, including personal wealth management and trust services; certificates of deposit; interest-bearing and non-interest-bearing checking accounts; traditional money market and savings accounts; loans, both secured and unsecured, and Internet banking.

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