Analyzing Cadence Bancorp (NYSE:CADE) and American National BankShares (NYSE:AMNB)

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Cadence Bancorp (NYSE:CADE) and American National BankShares (NASDAQ:AMNB) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Volatility & Risk

Cadence Bancorp has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500. Comparatively, American National BankShares has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Dividends

Cadence Bancorp pays an annual dividend of $0.70 per share and has a dividend yield of 4.5%. American National BankShares pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. Cadence Bancorp pays out 33.8% of its earnings in the form of a dividend. American National BankShares pays out 37.2% 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. American National BankShares has increased its dividend for 3 consecutive years. Cadence Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Cadence Bancorp and American National BankShares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Bancorp 0 5 2 1 2.50
American National BankShares 0 0 2 0 3.00

Cadence Bancorp presently has a consensus target price of $22.63, suggesting a potential upside of 46.82%. American National BankShares has a consensus target price of $41.50, suggesting a potential upside of 18.54%. Given Cadence Bancorp’s higher probable upside, equities research analysts plainly believe Cadence Bancorp is more favorable than American National BankShares.

Earnings & Valuation

This table compares Cadence Bancorp and American National BankShares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Bancorp $607.30 million 3.27 $166.26 million $2.07 7.44
American National BankShares $82.04 million 4.77 $22.58 million $2.69 13.01

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

Profitability

This table compares Cadence Bancorp and American National BankShares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cadence Bancorp 22.62% 12.64% 1.55%
American National BankShares 16.93% 12.26% 1.48%

Institutional & Insider Ownership

91.9% of Cadence Bancorp shares are owned by institutional investors. Comparatively, 31.9% of American National BankShares shares are owned by institutional investors. 3.3% of Cadence Bancorp shares are owned by company insiders. Comparatively, 5.0% of American National BankShares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Cadence Bancorp beats American National BankShares on 11 of the 17 factors compared between the two stocks.

About Cadence Bancorp

Cadence Bancorporation, a financial holding company, through its subsidiary, Cadence Bank, National Association, provides commercial banking products and services to middle-market commercial businesses, high net worth individuals, business owners, and retail customers in the United States. The company operates through Banking and Financial Services segments. It offers checking, savings, money market, and other deposit accounts. The company also provides commercial and industrial, and commercial and residential real estate loans; other consumer loans, such as home equity, auto, boat, and personal installment loans; and shared national credits. In addition, it offers wealth management and other fiduciary, and private banking services under the Linscomb & Williams and Cadence Trust brands. Further, the company provides life, disability, and long-term care insurance products, as well as buy-sell agreements to retail and commercial customers under the Cadence Investment Services brand through financial consultants and advisors, and third party partners, as well as directly. Additionally, it offers correspondent banking products and services comprising treasury and liquidity management, Fed funds accommodation, wholesale mortgage, and commercial real estate participation services for financial institutions; and payroll and human resources services, payroll cards, and employee health insurance products. The company also provides debit and credit cards; treasury management and merchant services; employee and payroll benefit solutions; and automated clearing house, lock-box, remote deposit capture, foreign exchange, and other treasury services, as well as online, mobile, and telephone banking services. As of December 31, 2018, it operated 66 branch offices in Texas, Alabama, Florida, Mississippi, and Tennessee; and 32 branches throughout Georgia. The company also serves through ATMs and ITMs. Cadence Bancorporation was founded in 1885 and is headquartered in Houston, Texas.

About American National BankShares

American National Bankshares Inc. operates as the bank holding company for American National Bank and Trust Company that provides financial products and services. The company operates through two segments, Community Banking, and Trust and Investment Services. It accepts deposit products, including checking, money market, savings, and consumer and commercial time deposits, as well as certificates of deposit. The company's loan products comprise commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, home equity loans, mortgage loans, and consumer loans. It also offers trust and investment services, such as estate planning, trust account administration, investment management, and retail brokerage services; online and telephone banking services; insurance services; and investment management services, including purchasing equity, fixed income, and mutual fund investments for customer accounts, as well as operates 34 automated teller machines. As of December 31, 2018, it operated 24 banking offices and 2 loan production offices in Roanoke, Virginia and Raleigh, North Carolina. American National Bankshares Inc. was founded in 1909 and is headquartered in Danville, Virginia.

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