Pinnacle Financial Partners (NASDAQ: PNFP) and Merchants Bancshares,Inc. (NASDAQ:MBVT) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Volatility & Risk

Pinnacle Financial Partners has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Merchants Bancshares,Inc. has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Dividends

Pinnacle Financial Partners pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Merchants Bancshares,Inc. pays an annual dividend of $1.12 per share and has a dividend yield of 2.2%. Pinnacle Financial Partners pays out 17.3% of its earnings in the form of a dividend. Merchants Bancshares,Inc. pays out 51.6% 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.

Valuation & Earnings

This table compares Pinnacle Financial Partners and Merchants Bancshares,Inc.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pinnacle Financial Partners $484.61 million 10.99 $127.22 million $3.23 21.22
Merchants Bancshares,Inc. N/A N/A N/A $2.17 22.95

Pinnacle Financial Partners has higher revenue and earnings than Merchants Bancshares,Inc.. Pinnacle Financial Partners is trading at a lower price-to-earnings ratio than Merchants Bancshares,Inc., indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

71.8% of Pinnacle Financial Partners shares are held by institutional investors. Comparatively, 38.6% of Merchants Bancshares,Inc. shares are held by institutional investors. 5.4% of Pinnacle Financial Partners shares are held by insiders. Comparatively, 8.8% of Merchants Bancshares,Inc. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Pinnacle Financial Partners and Merchants Bancshares,Inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pinnacle Financial Partners 27.41% 7.36% 1.18%
Merchants Bancshares,Inc. 20.64% 9.19% 0.71%

Analyst Ratings

This is a breakdown of current ratings for Pinnacle Financial Partners and Merchants Bancshares,Inc., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pinnacle Financial Partners 0 1 5 0 2.83
Merchants Bancshares,Inc. 0 0 0 0 N/A

Pinnacle Financial Partners presently has a consensus price target of $75.00, suggesting a potential upside of 9.41%. Given Pinnacle Financial Partners’ higher possible upside, analysts plainly believe Pinnacle Financial Partners is more favorable than Merchants Bancshares,Inc..

Summary

Pinnacle Financial Partners beats Merchants Bancshares,Inc. on 9 of the 13 factors compared between the two stocks.

Pinnacle Financial Partners Company Profile

Pinnacle Financial Partners, Inc. is a bank holding company. The Company operates through its subsidiary, Pinnacle Bank. The Company operates as a community bank primarily in the urban markets of Nashville, Knoxville, Memphis and Chattanooga, Tennessee and other counties. It provides the personalized service associated with small community banks, while seeking to offer the products and services, such as investments and treasury management. Pinnacle Bank offers an array of convenience-centered products and services, including round the clock telephone and Internet banking, mobile banking, debit and credit cards, direct deposit, remote deposit and cash management services for small- to medium-sized businesses. In addition, Pinnacle Bank is associated with a network of automated teller machines of other financial institutions that its clients are able to use throughout Tennessee and other regions.

Merchants Bancshares,Inc. Company Profile

Merchants Bancshares, Inc. is a bank holding company. The Company’s subsidiary, Merchants Bank (the Bank), is a commercial bank. The Bank offers a range of deposit, loan, cash management and trust services to meet the financial needs of individual consumers, businesses and municipalities. Merchants Bank’s trust division offers investment management, financial planning and trustee services. The Bank offers commercial, financial and agricultural loans, municipal loans, residential real estate loans, commercial real estate loans, construction real estate loans and consumer installment loans for various personal needs, including vehicle and boat financing. The Bank’s deposits include demand; savings and interest bearing checking and money market accounts, and time deposits.

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