Head-To-Head Contrast: Renasant (NYSE:RNST) versus Mechanics Bancorp (NASDAQ:MCHB)

Mechanics Bancorp (NASDAQ:MCHB) and Renasant (NYSE:RNST) are both mid-cap financial services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Mechanics Bancorp and Renasant, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mechanics Bancorp	0	2	0	0	2.00
Renasant	0	1	0	1	3.00

Mechanics Bancorp currently has a consensus price target of $14.50, indicating a potential downside of 1.16%. Given Mechanics Bancorp’s higher probable upside, research analysts plainly believe Mechanics Bancorp is more favorable than Renasant.

Profitability

This table compares Mechanics Bancorp and Renasant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mechanics Bancorp	-14.49%	4.74%	0.41%
Renasant	11.26%	6.99%	1.01%

Dividends

Mechanics Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 5.7%. Renasant pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. Mechanics Bancorp pays out -12.4% of its earnings in the form of a dividend. Renasant pays out 46.2% 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. Mechanics Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Mechanics Bancorp has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Renasant has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Insider & Institutional Ownership

74.7% of Mechanics Bancorp shares are owned by institutional investors. Comparatively, 77.3% of Renasant shares are owned by institutional investors. 4.6% of Mechanics Bancorp shares are owned by company insiders. Comparatively, 2.8% of Renasant shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Mechanics Bancorp and Renasant”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mechanics Bancorp	$594.41 million	5.46	-$144.34 million	($6.76)	-2.17
Renasant	$1.09 billion	3.15	$195.46 million	$1.99	18.18

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

Summary

Renasant beats Mechanics Bancorp on 10 of the 16 factors compared between the two stocks.

About Mechanics Bancorp

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services primarily in the Western United States. The company offers personal and business checking, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; credit cards; insurance; and treasury management products and services. Its loan products include commercial business and agriculture loans, single family residential mortgages, consumer loans, commercial loans secured by residential and commercial real estate, and construction loans for residential and commercial real estate development, as well as consumer installment loans and permanent loans on commercial real estate and single-family residences. In addition, the company offers its products and services through bank branches, loan production offices, and ATMs, as well as through online, mobile, and telephone banking. As of December 31, 2021, it operated 60 full-service bank branches located in Washington state, Northern and Southern California, the Portland, Oregon, and Hawaii; and five primary stand-alone commercial lending centers in Central Washington, Oregon, Southern California, Idaho, and Utah. HomeStreet, Inc. serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.

About Renasant

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate–1-4 family mortgage; real estate–commercial mortgage; real estate–construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services. The Insurance segment provides insurance agency services, such as commercial and personal insurance products through insurance carriers. The Wealth Management segment offers a range of wealth management and fiduciary services, including administration and management of trust accounts, such as personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts; annuities, mutual funds, and other investment services through a third party broker-dealer; and qualified retirement plans, IRAs, employee benefit plans, personal trusts, and estates. As of December 31, 2021, the company operated a network of 189 banking, lending, and mortgage offices located in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee; 150 full-service branches and 11 limited-service branches; 173 ATMs; and 38 interactive teller machines. Renasant Corporation was founded in 1904 and is headquartered in Tupelo, Mississippi.