Prosperity Bancshares (PB) versus Its Competitors Critical Analysis

Prosperity Bancshares (NYSE:PB) is one of 919 publicly-traded companies in the “Banks” industry, but how does it weigh in compared to its peers? We will compare Prosperity Bancshares to similar companies based on the strength of its analyst recommendations, dividends, earnings, valuation, institutional ownership, profitability and risk.

Profitability

This table compares Prosperity Bancshares and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	26.99%	7.68%	1.45%
Prosperity Bancshares Competitors	15.64%	9.43%	0.93%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Prosperity Bancshares and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	2	6	7	1	2.44
Prosperity Bancshares Competitors	7492	30246	27845	1488	2.35

Prosperity Bancshares presently has a consensus target price of $78.36, suggesting a potential upside of 7.95%. As a group, “Banks” companies have a potential upside of 14.54%. Given Prosperity Bancshares’ peers higher possible upside, analysts plainly believe Prosperity Bancshares has less favorable growth aspects than its peers.

Risk & Volatility

Prosperity Bancshares has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Prosperity Bancshares’ peers have a beta of 0.61, indicating that their average share price is 39% less volatile than the S&P 500.

Insider & Institutional Ownership

80.7% of Prosperity Bancshares shares are held by institutional investors. Comparatively, 47.8% of shares of all “Banks” companies are held by institutional investors. 4.0% of Prosperity Bancshares shares are held by insiders. Comparatively, 9.7% of shares of all “Banks” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Prosperity Bancshares and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Prosperity Bancshares	$1.74 billion	$542.84 million	13.20
Prosperity Bancshares Competitors	$37.93 billion	$2.42 billion	21.39

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

Dividends

Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.3%. Prosperity Bancshares pays out 43.6% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 8.9% and pay out 28.9% of their earnings in the form of a dividend. Prosperity Bancshares has raised its dividend for 27 consecutive years. Prosperity Bancshares lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Prosperity Bancshares peers beat Prosperity Bancshares on 8 of the 15 factors compared.

About Prosperity Bancshares

Prosperity Bancshares, Inc. is a bank holding company whose principal subsidiary is Prosperity Bank. The company provides commercial and consumer banking services, including deposit accounts, business and personal loans, mortgage lending, and cash management services. Founded in 1983 as a community bank in Edna, Texas, Prosperity has expanded through organic growth and acquisitions. It serves customers across Texas and Oklahoma, with a presence in communities including Houston, Dallas–Fort Worth, Austin, San Antonio, and Tulsa.