Pacific Premier Bancorp (NASDAQ: PPBI) and Independent Bank Group (NASDAQ:IBTX) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.
Risk and Volatility
Pacific Premier Bancorp has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.
This is a breakdown of recent ratings for Pacific Premier Bancorp and Independent Bank Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Premier Bancorp||0||1||3||0||2.75|
|Independent Bank Group||0||1||5||0||2.83|
Pacific Premier Bancorp presently has a consensus target price of $45.00, indicating a potential upside of 8.30%. Independent Bank Group has a consensus target price of $72.00, indicating a potential downside of 3.36%. Given Pacific Premier Bancorp’s higher possible upside, research analysts clearly believe Pacific Premier Bancorp is more favorable than Independent Bank Group.
Earnings & Valuation
This table compares Pacific Premier Bancorp and Independent Bank Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pacific Premier Bancorp||$186.19 million||10.31||$40.10 million||$1.62||25.65|
|Independent Bank Group||$229.60 million||9.15||$53.54 million||$3.10||24.03|
Independent Bank Group has higher revenue and earnings than Pacific Premier Bancorp. Independent Bank Group is trading at a lower price-to-earnings ratio than Pacific Premier Bancorp, indicating that it is currently the more affordable of the two stocks.
This table compares Pacific Premier Bancorp and Independent Bank Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Premier Bancorp||21.82%||9.21%||1.25%|
|Independent Bank Group||23.46%||8.11%||1.08%|
Independent Bank Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Pacific Premier Bancorp does not pay a dividend. Independent Bank Group pays out 12.9% of its earnings in the form of a dividend.
Institutional & Insider Ownership
71.8% of Pacific Premier Bancorp shares are owned by institutional investors. Comparatively, 47.7% of Independent Bank Group shares are owned by institutional investors. 4.6% of Pacific Premier Bancorp shares are owned by insiders. Comparatively, 7.7% of Independent Bank Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Independent Bank Group beats Pacific Premier Bancorp on 9 of the 16 factors compared between the two stocks.
About Pacific Premier Bancorp
Pacific Premier Bancorp, Inc. is a bank holding company. The Company’s subsidiary, Pacific Premier Bank (the Bank), is a California state-chartered commercial bank. The Company’s principal business is attracting deposits from small and middle market businesses and consumers and investing those deposits together with funds generated from operations and borrowings, primarily in commercial business loans and various types of commercial real estate (CRE) loans. The Company provides banking services within its targeted markets in California to businesses, including the owners and employees of those businesses, professionals, real estate investors and non-profit organizations. Additionally, it provides certain banking services nationwide. It also provides customized cash management, electronic banking services and credit facilities to Home Owners Associations (HOA) and HOA management companies nationwide. It provides the United States Small Business Administration (SBA) loans nationwide.
About Independent Bank Group
Independent Bank Group, Inc. is a bank holding company. Through the Company’s subsidiary, Independent Bank (the Bank), the Company provides a range of commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. As of December 31, 2016, the Company operated 41 banking offices in the Dallas/North Texas area, the Austin/Central Texas area, and the Houston metropolitan area. The Company offers residential mortgages through its mortgage brokerage division. As a mortgage broker, the Company originates residential mortgages, which are sold into the secondary market shortly after closing. The Company also provides wealth management services to its customers, including investment advisory and other related services. The Company offers a range of commercial and retail lending products to businesses, professionals and individuals. Deposits are the Company’s principal source of funds for use in lending and other general banking purposes.
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