Financial Survey: Zions Bancorp (ZION) versus Cullen/Frost Bankers (CFR)

Zions Bancorp (NASDAQ:ZION) and Cullen/Frost Bankers (NYSE:CFR) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Zions Bancorp and Cullen/Frost Bankers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zions Bancorp 0 7 13 0 2.65
Cullen/Frost Bankers 2 5 3 0 2.10

Zions Bancorp presently has a consensus target price of $58.95, suggesting a potential upside of 17.52%. Cullen/Frost Bankers has a consensus target price of $115.75, suggesting a potential upside of 12.35%. Given Zions Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Zions Bancorp is more favorable than Cullen/Frost Bankers.

Earnings and Valuation

This table compares Zions Bancorp and Cullen/Frost Bankers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zions Bancorp $2.74 billion 3.56 $592.00 million $2.86 17.54
Cullen/Frost Bankers $1.23 billion 5.36 $364.14 million $5.45 18.90

Zions Bancorp has higher revenue and earnings than Cullen/Frost Bankers. Zions Bancorp is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Zions Bancorp and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zions Bancorp 26.57% 11.84% 1.26%
Cullen/Frost Bankers 32.11% 13.74% 1.38%

Risk and Volatility

Zions Bancorp has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Insider and Institutional Ownership

94.8% of Zions Bancorp shares are held by institutional investors. Comparatively, 79.1% of Cullen/Frost Bankers shares are held by institutional investors. 1.6% of Zions Bancorp shares are held by insiders. Comparatively, 5.2% of Cullen/Frost Bankers shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Zions Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Cullen/Frost Bankers pays an annual dividend of $2.68 per share and has a dividend yield of 2.6%. Zions Bancorp pays out 42.0% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 49.2% 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. Zions Bancorp has raised its dividend for 5 consecutive years and Cullen/Frost Bankers has raised its dividend for 25 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cullen/Frost Bankers beats Zions Bancorp on 9 of the 17 factors compared between the two stocks.

About Zions Bancorp

Zions Bancorporation, National Association provides various banking and related services primarily in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. The company offers community banking services, such as small and medium-sized business and corporate banking; commercial and residential development, construction, and term lending; retail banking; treasury cash management and related products and services; residential mortgage servicing and lending services; trust and wealth management services; capital markets services, including municipal finance advisory and underwriting; and investment services. It also offers personal banking services to individuals, including home mortgages, bankcards, other installment loans, home equity lines of credit, checking accounts, savings accounts, certificates of deposit of various types and maturities, trust services, safe deposit facilities, and Internet and mobile banking services. In addition, the company provides self-directed brokerage services; and small business administration lending and secondary market agricultural real estate mortgage loans; and bond transfer, stock transfer, and escrow services for corporate customers. As of December 31, 2017, it operated 433 domestic branches. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is based in Salt Lake City, Utah.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. The company operates in two segments, Banking and Frost Wealth Advisors. It provides commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction, equipment, inventories and accounts receivable, and acquisition financing; commercial leasing; and treasury management services. The company also offers consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. Its international banking services comprise accepting deposits, making loans, issuing letter of credits, handling foreign collections, transmitting funds, and dealing in foreign exchange. In addition, the company acts as correspondent for approximately 203 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services consisting of sales and trading, new issue underwriting, money market trading, advisory services, and securities safekeeping and clearance; and supports international business activities. Further, it offers insurance and securities brokerage services; holds securities for investment purposes; and provides loans to qualified borrowers, as well as offers investment management services to Frost-managed mutual funds, institutions, and individuals. The company operates approximately 134 financial centers and approximately 1,300 ATMs in Texas. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

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