Head-To-Head Review: Hilltop (HTH) versus Its Peers

Hilltop (NYSE:HTH) is one of 919 public companies in the “Banks” industry, but how does it compare to its competitors? We will compare Hilltop to similar companies based on the strength of its analyst recommendations, profitability, valuation, risk, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

57.1% of Hilltop shares are held by institutional investors. Comparatively, 48.0% of shares of all “Banks” companies are held by institutional investors. 5.4% of Hilltop shares are held by company insiders. Comparatively, 9.8% of shares of all “Banks” companies are held by company 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.

Volatility and Risk

Hilltop has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Hilltop’s competitors have a beta of 0.61, indicating that their average stock price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hilltop and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	1	3	1	0	2.00
Hilltop Competitors	7470	30199	27763	1466	2.35

Hilltop currently has a consensus target price of $42.00, indicating a potential upside of 11.17%. As a group, “Banks” companies have a potential upside of 13.65%. Given Hilltop’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Hilltop has less favorable growth aspects than its competitors.

Profitability

This table compares Hilltop and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	9.08%	6.51%	0.88%
Hilltop Competitors	15.64%	9.43%	0.93%

Dividends

Hilltop pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Hilltop pays out 36.7% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.1% and pay out 28.9% of their earnings in the form of a dividend. Hilltop has increased its dividend for 8 consecutive years. Hilltop lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation and Earnings

This table compares Hilltop and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Hilltop	$1.63 billion	$165.59 million	15.74
Hilltop Competitors	$37.92 billion	$2.42 billion	17.48

Hilltop’s competitors have higher revenue and earnings than Hilltop. Hilltop is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Hilltop competitors beat Hilltop on 13 of the 15 factors compared.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.