Reviewing Cadence Bancorp (CADE) & BB&T (BBT)

Cadence Bancorp (NYSE:CADE) and BB&T (NYSE:BBT) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Profitability

This table compares Cadence Bancorp and BB&T’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cadence Bancorp 25.78% 12.30% 1.51%
BB&T 23.52% 11.66% 1.40%

Risk and Volatility

Cadence Bancorp has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, BB&T has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cadence Bancorp and BB&T, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Bancorp 0 2 4 1 2.86
BB&T 0 7 13 0 2.65

Cadence Bancorp presently has a consensus price target of $30.57, suggesting a potential upside of 50.38%. BB&T has a consensus price target of $55.53, suggesting a potential upside of 10.25%. Given Cadence Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Cadence Bancorp is more favorable than BB&T.

Insider & Institutional Ownership

87.8% of Cadence Bancorp shares are owned by institutional investors. Comparatively, 63.8% of BB&T shares are owned by institutional investors. 0.1% of Cadence Bancorp shares are owned by insiders. Comparatively, 0.5% of BB&T shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Cadence Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. BB&T pays an annual dividend of $1.62 per share and has a dividend yield of 3.2%. Cadence Bancorp pays out 40.5% of its earnings in the form of a dividend. BB&T pays out 51.6% 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. BB&T has increased its dividend for 6 consecutive years. BB&T is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Cadence Bancorp and BB&T’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Bancorp $430.78 million 3.95 $102.35 million $1.48 13.74
BB&T $12.16 billion 3.19 $2.39 billion $3.14 16.04

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

Summary

Cadence Bancorp beats BB&T on 10 of the 18 factors compared between the two stocks.

Cadence Bancorp Company Profile

Cadence Bancorporation operates as the bank holding company for Cadence Bank, N.A. that provides commercial banking products and services to 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 various deposit products, including checking, savings, money market, and other deposit accounts. The company also provides commercial and industrial, and residential and commercial 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, long-term care, homeowner's, property and casualty, and key person insurance products, as well as buy-sell agreements to retail customers; and business owner, commercial vehicle, property and liability, workers compensation, and specialty liability policies to commercial customers under the Cadence Insurance Services and Cadence Investment Services brands through financial consultants and advisors, and third party partners, as well as directly. Additionally, it offers various financial services comprising debit and credit cards; treasury management and merchant services; employee and payroll benefit solutions; automated clearing house, lock-box, and remote deposit capture services; international trade finance; and international trade, foreign exchange, and other treasury services, as well as online, mobile, and telephone banking services. As of December 31, 2017, it operated 63 full-service and 2 drive-thru branches in Alabama, Florida, Texas, Mississippi, and Tennessee, as well as 78 ATMs and 9 ITMs. The company was founded in 1885 and is headquartered in Houston, Texas. Cadence Bancorporation is a subsidiary of Cadence Bancorp, LLC.

BB&T Company Profile

BB&T Corporation operates as a financial holding company that provides various banking and trust services for small and mid-size businesses, public agencies, local governments, and individuals. The company operates through four segments: CB-Retail, CB-Commercial, IH&PF, and FS&CF. Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides various funding services; and asset management, automobile lending; bankcard lending; consumer finance; home equity and mortgage lending; insurance, such as property and casualty, life, health, employee benefits, commercial general liability, surety, title and other insurance products; investment brokerage; mobile/online banking; and payment, lease financing, small business lending, and wealth management/private banking services. In addition, it offers association, capital markets, institutional trust, insurance premium and commercial finance, international banking, leasing, merchant, commercial deposit and treasury, commercial middle market lending, floor plan lending, commercial mortgage lending, mortgage warehouse lending, private equity investments, real estate lending, and supply chain management services. Further, the company provides retail brokerage, equity and debt underwriting, investment advice, corporate finance, and equity research services, as well as facilitates the origination, trading, and distribution of fixed-income securities and equity products. Additionally, BB&T Corporation offers non-deposit investment products, including discount brokerage services, equities, fixed-rate, variable-rate and index annuities, mutual funds, government and municipal bonds, and money market funds. As of October 16, 2018, it operated through approximately 1,900 financial centers. The company was founded in 1872 and is headquartered in Winston-Salem, North Carolina.

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