Carter Bankshares (NASDAQ:CARE – Get Free Report) and Texas Capital Bancshares (NASDAQ:TCBI – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.
Dividends
Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Texas Capital Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Carter Bankshares pays out 6.9% of its earnings in the form of a dividend. Texas Capital Bancshares pays out 10.4% 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. Carter Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Carter Bankshares and Texas Capital Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carter Bankshares | 0 | 4 | 1 | 0 | 2.20 |
| Texas Capital Bancshares | 1 | 8 | 4 | 0 | 2.23 |
Risk & Volatility
Carter Bankshares has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Texas Capital Bancshares has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.
Earnings and Valuation
This table compares Carter Bankshares and Texas Capital Bancshares”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carter Bankshares | $214.28 million | 3.14 | $31.00 million | $5.81 | 5.22 |
| Texas Capital Bancshares | $1.33 billion | 3.14 | $330.24 million | $7.69 | 12.46 |
Texas Capital Bancshares has higher revenue and earnings than Carter Bankshares. Carter Bankshares is trading at a lower price-to-earnings ratio than Texas Capital Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Carter Bankshares and Texas Capital Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carter Bankshares | 36.79% | 7.46% | 0.73% |
| Texas Capital Bancshares | 17.90% | 10.86% | 1.10% |
Insider & Institutional Ownership
41.5% of Carter Bankshares shares are held by institutional investors. Comparatively, 96.9% of Texas Capital Bancshares shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by insiders. Comparatively, 1.9% of Texas Capital Bancshares 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.
Summary
Texas Capital Bancshares beats Carter Bankshares on 12 of the 16 factors compared between the two stocks.
About Carter Bankshares
Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.
About Texas Capital Bancshares
Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking; consumer banking; investment banking solutions, including capital markets, mergers and acquisitions, and syndicated finance, as well as financial sponsor coverage, capital solutions, and institutional services; and wealth management services, such as investment management, financial planning, lockbox and insurance, securities-based lending, estate planning, and business succession, as well as philanthropic, trustee and executor, custom credit, and depository services. It also provides deposit accounts, analyzed accounts, commercial card, SBA and business loans, packaged solutions, and merchant services; liquidity and investments, working capital, international trade and payment, and treasury and credit products; and commercial real estate, homebuilder and community, and mortgage finance. In addition, the company offers payables and receivables management; online and mobile banking; term loans and lines of credit, equipment finance and lease, acquisition finance, and asset-based lending; private wealth advisory solutions; and checking and savings accounts, debit and credit cards, and certificates of deposit, as well as ETF and funds management services. Further, it provides financial institution money market accounts and loan syndication products; commercial loans for financing for working capital, organic growth, and acquisitions; real estate term and construction loans; mortgage warehouse lending services; treasury management, trust, and advisory and escrow services; and letters of credit. The company operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.
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