Banc of California (NYSE: BANC) and Pinnacle Financial Partners (NASDAQ:PNFP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Valuation and Earnings
This table compares Banc of California and Pinnacle Financial Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banc of California||$501.02 million||1.99||$57.70 million||$0.82||24.02|
|Pinnacle Financial Partners||$781.04 million||6.25||$173.97 million||$3.57||17.56|
Pinnacle Financial Partners has higher revenue and earnings than Banc of California. Pinnacle Financial Partners is trading at a lower price-to-earnings ratio than Banc of California, indicating that it is currently the more affordable of the two stocks.
Banc of California pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. Pinnacle Financial Partners pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Banc of California pays out 63.4% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 15.7% 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.
This is a breakdown of recent ratings and price targets for Banc of California and Pinnacle Financial Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Banc of California||1||3||2||0||2.17|
|Pinnacle Financial Partners||0||0||11||0||3.00|
Banc of California currently has a consensus price target of $21.40, suggesting a potential upside of 8.63%. Pinnacle Financial Partners has a consensus price target of $72.63, suggesting a potential upside of 15.83%. Given Pinnacle Financial Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Pinnacle Financial Partners is more favorable than Banc of California.
Volatility and Risk
Banc of California has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.
Institutional and Insider Ownership
76.3% of Pinnacle Financial Partners shares are held by institutional investors. 18.1% of Banc of California shares are held by insiders. Comparatively, 3.4% of Pinnacle Financial Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Banc of California and Pinnacle Financial Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Banc of California||11.46%||8.37%||0.60%|
|Pinnacle Financial Partners||24.09%||7.52%||1.26%|
Pinnacle Financial Partners beats Banc of California on 12 of the 16 factors compared between the two stocks.
Banc of California Company Profile
Banc of California, Inc. operates as the bank holding company for Banc of California, National Association that provides banking products and services in the United States. The company's deposits consist of checking, savings, money market, retirement, and interest and non-interest bearing demand accounts, as well as certificates of deposit; and commercial and consumer loan products include commercial and industrial loans, commercial real estate loans, multi-family loans, small business administration (SBA) guaranteed business loans, construction and renovation loans, single family residential mortgage loans, warehouse loans, asset-insurance-or security backed loans, home equity lines of credit, consumer and business lines of credit, home equity loans, and other consumer loans. It also invests in SBA loan pool securities, mortgage-backed securities, corporate bonds, and collateralized loan obligations. In addition, the company offers automated bill payment, cash and treasury management, foreign exchange, interest rate swaps, card payment services, remote and mobile deposit capture, ACH origination, wire transfer, direct deposit services, and safe deposit boxes, as well as Internet banking services. As of December 31, 2017, it operated 34 branches in San Diego, Orange, Santa Barbara, and Los Angeles counties in California. The company was formerly known as First PacTrust Bancorp, Inc. and changed its name to Banc of California, Inc. in July 2013. Banc of California, Inc. was founded in 1941 and is headquartered in Santa Ana, California.
Pinnacle Financial Partners Company Profile
Pinnacle Financial Partners, Inc. operates as a bank holding company for Pinnacle Bank that provides various banking products and services in the United States. The company accepts various deposits, including savings, checking, interest-bearing checking, money market, and certificate of deposit accounts. Its loan products include commercial loans, such as equipment and working capital loans; commercial real estate loans comprising investment properties and business loans secured by real estate; and loans to individuals consisting of secured and unsecured installment and term loans, lines of credit, residential first mortgage loans, and home equity loans and lines of credit. The company also offers various securities and other financial products; investment products; brokerage and investment advisory programs; and fiduciary and investment management services, such as personal trust, endowments, foundations, individual retirement accounts, pensions, and custody. In addition, it provides insurance products primarily in the property and casualty area; merger and acquisition advisory services; and private debt, equity and mezzanine, interest rate derivatives, and other middle-market advisory services. Further, the company offers treasury management, telephone and online banking, mobile banking, debit and credit cards, direct and remote deposit, automated teller machine, and cash management services. It serves individuals, small-to medium-sized businesses, and professional entities. As of December 31, 2017, the company operates 114 offices, including 46 in Tennessee, 39 in North Carolina, 21 in South Carolina, and 8 in Virginia. Pinnacle Financial Partners, Inc. was founded in 2000 and is headquartered in Nashville, Tennessee.
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