Critical Review: Hancock (HBHC) vs. Signature Bank (SBNY)

Hancock (NASDAQ:HBHC) and Signature Bank (NASDAQ:SBNY) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Hancock and Signature Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hancock N/A N/A N/A
Signature Bank 27.66% 14.34% 1.32%

Institutional and Insider Ownership

75.7% of Hancock shares are held by institutional investors. Comparatively, 94.4% of Signature Bank shares are held by institutional investors. 1.0% of Hancock shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Hancock and Signature Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hancock N/A N/A N/A N/A N/A
Signature Bank $1.51 billion 4.06 $387.20 million $8.91 12.47

Signature Bank has higher revenue and earnings than Hancock.

Analyst Ratings

This is a summary of recent recommendations for Hancock and Signature Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hancock 0 1 2 0 2.67
Signature Bank 0 4 10 0 2.71

Hancock presently has a consensus target price of $58.33, suggesting a potential upside of 12.94%. Signature Bank has a consensus target price of $139.74, suggesting a potential upside of 25.79%. Given Signature Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Signature Bank is more favorable than Hancock.

Dividends

Hancock pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. Signature Bank pays an annual dividend of $2.24 per share and has a dividend yield of 2.0%. Signature Bank pays out 25.1% of its earnings in the form of a dividend.

Summary

Signature Bank beats Hancock on 9 of the 11 factors compared between the two stocks.

Hancock Company Profile

Hancock Holding Company operates as the bank holding company for Whitney Bank that provides a range of community banking services to commercial, small business, and retail customers. The company offers various deposit products, including noninterest-bearing demand deposits, interest-bearing transaction accounts, savings accounts, money market deposit accounts, and time deposit accounts. It also provides commercial and industrial; commercial real estate; construction and land development; and residential mortgages, including fixed and adjustable rate loans; and consumer loans comprising second lien mortgage home loans, home equity lines of credit, and nonresidential consumer purpose loans. In addition, the company offers treasury management services, investment brokerage services, letters of credit and financial guarantees, and revolving credit facilities. Further, it provides trust and investment management services to retirement plans, corporations, and individuals. Additionally, the company provides insurance agency services, discount investment brokerage services, life insurance, and consumer financing services, as well as operates and sells foreclosed assets. It operates approximately 237 full service banking and financial services offices and 277 automated teller machines in Gulf south corridor, south Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and Panhandle regions of Florida; and Houston, Texas under the Hancock and Whitney Bank brand names, as well as operates a loan production office in Nashville, Tennessee. Hancock Holding Company was founded in 1883 and is headquartered in Gulfport, Mississippi.

Signature Bank Company Profile

Signature Bank provides various business and personal banking products and services. It accepts various deposit products, including commercial checking accounts, money market accounts, escrow deposit accounts, cash concentration accounts, interest-bearing and non-interest-bearing checking accounts, certificates of deposit, time deposits, and other cash management products. The company also offers loan products comprising commercial and industrial loans; real estate loans, such as loans secured by commercial and residential properties, and construction and land loans; temporary financing for commercial and residential properties; letters of credit; and personal lines of credit and loans to acquire personal assets, as well as asset-based lending, mortgages, home equity loans, and credit card accounts. In addition, it provides investment, brokerage, and asset management products and services; retirement products, such as individual retirement accounts and administrative services for retirement vehicles, which include pension, profit sharing, and 401(k) plans to its clients, as well as business retirement accounts; and a range of financing and leasing products consisting of equipment, transportation, taxi medallion, commercial marine, commercial vehicle, financing, and national franchise financing services. Further, the company offers wealth management services to its high net worth personal clients; and a range of individual and group insurance products that comprise health, life, disability, and long-term care insurance products as an agent. Additionally, it purchases, securitizes, and sells guaranteed portions of the U.S. small business administration loans. As of January 19, 2017, the company operated 30 private client offices located in the New York metropolitan area, which included Manhattan, Brooklyn, Westchester, Long Island, Queens, the Bronx, Staten Island, and Connecticut. Signature Bank was incorporated in 2000 and is headquartered in New York, New York.

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