International Bancshares (NASDAQ:IBOC) vs. Cullen/Frost Bankers (NYSE:CFR) Head-To-Head Analysis

International Bancshares (NASDAQ:IBOC) and Cullen/Frost Bankers (NYSE:CFR) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Volatility & Risk

International Bancshares has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Dividends

International Bancshares pays an annual dividend of $1.46 per share and has a dividend yield of 1.9%. Cullen/Frost Bankers pays an annual dividend of $4.12 per share and has a dividend yield of 2.6%. International Bancshares pays out 21.8% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 40.1% 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. International Bancshares has raised its dividend for 16 consecutive years and Cullen/Frost Bankers has raised its dividend for 32 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

65.9% of International Bancshares shares are owned by institutional investors. Comparatively, 86.9% of Cullen/Frost Bankers shares are owned by institutional investors. 13.4% of International Bancshares shares are owned by company insiders. Comparatively, 1.1% of Cullen/Frost Bankers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for International Bancshares and Cullen/Frost Bankers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Bancshares	0	0	1	0	3.00
Cullen/Frost Bankers	2	7	2	2	2.31

International Bancshares currently has a consensus price target of $85.00, suggesting a potential upside of 12.72%. Cullen/Frost Bankers has a consensus price target of $151.92, suggesting a potential downside of 3.33%. Given International Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe International Bancshares is more favorable than Cullen/Frost Bankers.

Earnings and Valuation

This table compares International Bancshares and Cullen/Frost Bankers”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Bancshares	$1.06 billion	4.44	$412.29 million	$6.70	11.26
Cullen/Frost Bankers	$2.92 billion	3.38	$648.56 million	$10.27	15.30

Cullen/Frost Bankers has higher revenue and earnings than International Bancshares. International Bancshares is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares International Bancshares and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Bancshares	39.33%	13.16%	2.52%
Cullen/Frost Bankers	22.86%	15.58%	1.28%

Summary

Cullen/Frost Bankers beats International Bancshares on 10 of the 18 factors compared between the two stocks.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.