Head to Head Review: Cadence Bancorporation (NYSE:CADE) & Central Pacific Financial (NYSE:CPF)

Cadence Bancorporation (NYSE:CADE) and Central Pacific Financial (NYSE:CPF) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Earnings & Valuation

This table compares Cadence Bancorporation and Central Pacific Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Bancorporation $1.14 billion 3.26 $228.05 million $2.76 12.37
Central Pacific Financial $257.62 million 3.36 $37.27 million $2.47 12.53

Cadence Bancorporation has higher revenue and earnings than Central Pacific Financial. Cadence Bancorporation is trading at a lower price-to-earnings ratio than Central Pacific Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Cadence Bancorporation pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. Central Pacific Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. Cadence Bancorporation pays out 29.0% of its earnings in the form of a dividend. Central Pacific Financial pays out 40.5% 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. Cadence Bancorporation has increased its dividend for 1 consecutive years and Central Pacific Financial has increased its dividend for 1 consecutive years.

Risk & Volatility

Cadence Bancorporation has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Central Pacific Financial has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Institutional and Insider Ownership

68.7% of Cadence Bancorporation shares are held by institutional investors. Comparatively, 88.4% of Central Pacific Financial shares are held by institutional investors. 2.2% of Cadence Bancorporation shares are held by company insiders. Comparatively, 3.3% of Central Pacific Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Cadence Bancorporation and Central Pacific Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cadence Bancorporation 26.11% 11.45% 1.20%
Central Pacific Financial 26.50% 12.69% 0.99%

Analyst Ratings

This is a summary of current recommendations and price targets for Cadence Bancorporation and Central Pacific Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Bancorporation 0 4 3 1 2.63
Central Pacific Financial 0 0 2 0 3.00

Cadence Bancorporation presently has a consensus target price of $29.86, suggesting a potential downside of 12.54%. Central Pacific Financial has a consensus target price of $26.00, suggesting a potential downside of 15.99%. Given Cadence Bancorporation’s higher probable upside, analysts plainly believe Cadence Bancorporation is more favorable than Central Pacific Financial.

Summary

Central Pacific Financial beats Cadence Bancorporation on 9 of the 17 factors compared between the two stocks.

About Cadence Bancorporation

Cadence Bank provides banking and financial solutions to consumers, businesses and corporations. Its services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, and personal and business insurance. The bank was founded in 2009 and is headquartered in Tupelo, MS.

About Central Pacific Financial

Central Pacific Financial Corp. is a bank holding company, which engages in the provision of commercial banking services through its wholly owned subsidiary, Central Pacific Bank. It operates through the following segments: Banking Operations, Treasury, and All Others. The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending and servicing, indirect auto lending, trust services, and retail brokerage services. The Treasury segment involves in managing company’s investment securities portfolio and wholesale funding activities. The All Others segment consists electronic banking, data processing, and management of bank owned properties. The company was founded on February 1, 1982 and is headquartered in Honolulu, HI.

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