Regions Financial (NYSE:RF) and Cadence Bancorp (NYSE:CADE) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.
Institutional and Insider Ownership
73.4% of Regions Financial shares are held by institutional investors. Comparatively, 90.4% of Cadence Bancorp shares are held by institutional investors. 0.5% of Regions Financial shares are held by company insiders. Comparatively, 3.0% of Cadence Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Regions Financial pays an annual dividend of $0.62 per share and has a dividend yield of 5.3%. Cadence Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 2.0%. Regions Financial pays out 40.0% of its earnings in the form of a dividend. Cadence Bancorp pays out 11.6% 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. Regions Financial has increased its dividend for 7 consecutive years and Cadence Bancorp has increased its dividend for 1 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings and price targets for Regions Financial and Cadence Bancorp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Regions Financial presently has a consensus price target of $13.17, indicating a potential upside of 11.58%. Cadence Bancorp has a consensus price target of $13.70, indicating a potential upside of 38.52%. Given Cadence Bancorp’s higher possible upside, analysts plainly believe Cadence Bancorp is more favorable than Regions Financial.
Risk & Volatility
Regions Financial has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Cadence Bancorp has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.
Earnings & Valuation
This table compares Regions Financial and Cadence Bancorp’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Regions Financial||$6.76 billion||1.68||$1.58 billion||$1.55||7.61|
|Cadence Bancorp||$991.00 million||1.26||$201.96 million||$1.72||5.75|
Regions Financial has higher revenue and earnings than Cadence Bancorp. Cadence Bancorp is trading at a lower price-to-earnings ratio than Regions Financial, indicating that it is currently the more affordable of the two stocks.
This table compares Regions Financial and Cadence Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Regions Financial beats Cadence Bancorp on 12 of the 18 factors compared between the two stocks.
About Regions Financial
Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers in the United States. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing services; corresponding deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, branch small business and indirect loans, consumer credit cards, and other consumer loans, as well as the corresponding deposit relationships. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. The company also provides investment and insurance products; low income housing tax credit corporate fund syndication services; and other specialty financing services. As of February 21, 2019, it operated 1,500 banking offices and 2,000 automated teller machines across the South, Midwest, and Texas. Regions Financial Corporation was founded in 1852 and is headquartered in Birmingham, Alabama.
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.
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