Veritex (NASDAQ:VBTX – Get Rating) and Cadence Bank (NYSE:CADE – Get Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.
Risk & Volatility
Veritex has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.
Veritex pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. Cadence Bank pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Veritex pays out 28.7% of its earnings in the form of a dividend. Cadence Bank pays out 51.2% 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. Veritex has increased its dividend for 2 consecutive years and Cadence Bank has increased its dividend for 2 consecutive years.
This table compares Veritex and Cadence Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for Veritex and Cadence Bank, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Veritex currently has a consensus target price of $46.33, indicating a potential upside of 42.56%. Cadence Bank has a consensus target price of $37.50, indicating a potential upside of 49.52%. Given Cadence Bank’s higher possible upside, analysts plainly believe Cadence Bank is more favorable than Veritex.
Valuation & Earnings
This table compares Veritex and Cadence Bank’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Veritex||$374.89 million||4.67||$139.58 million||$2.79||11.65|
|Cadence Bank||$1.26 billion||2.16||$195.16 million||$1.72||14.58|
Cadence Bank has higher revenue and earnings than Veritex. Veritex is trading at a lower price-to-earnings ratio than Cadence Bank, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
77.5% of Veritex shares are held by institutional investors. Comparatively, 71.0% of Cadence Bank shares are held by institutional investors. 4.7% of Veritex shares are held by company insiders. Comparatively, 2.2% of Cadence Bank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Veritex beats Cadence Bank on 10 of the 16 factors compared between the two stocks.
Veritex Company Profile (Get Rating)
Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, consumer, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as mobile banking, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier’s checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. As of December 31, 2021, the company operated 18 full-service branches located in the Dallas-Fort Worth metroplex, and 10 full-service branches in the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.
Cadence Bank Company Profile (Get Rating)
Cadence Bank provides commercial banking and financial services in the United States. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. As of March 3, 2022, it operated approximately 400 branch locations across the South, Midwest, and Texas. The company was incorporated in 1876 and is headquartered in Tupelo, Mississippi.
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