Analyzing Texas Capital Bancshares (NASDAQ:TCBI) and Equity Bancshares (NASDAQ:EQBK)

Equity Bancshares (NASDAQ:EQBK) and Texas Capital Bancshares (NASDAQ:TCBI) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Earnings & Valuation

This table compares Equity Bancshares and Texas Capital Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Bancshares $200.49 million 2.06 $25.58 million $1.77 16.14
Texas Capital Bancshares $1.46 billion 2.30 $322.87 million $6.23 10.64

Texas Capital Bancshares has higher revenue and earnings than Equity Bancshares. Texas Capital Bancshares is trading at a lower price-to-earnings ratio than Equity Bancshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Equity Bancshares and Texas Capital Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Bancshares -42.38% 5.26% 0.61%
Texas Capital Bancshares 6.16% 5.48% 0.40%

Analyst Ratings

This is a breakdown of recent ratings for Equity Bancshares and Texas Capital Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Bancshares 0 1 1 0 2.50
Texas Capital Bancshares 1 9 3 0 2.15

Equity Bancshares presently has a consensus price target of $22.00, suggesting a potential downside of 23.00%. Texas Capital Bancshares has a consensus price target of $57.63, suggesting a potential downside of 13.10%. Given Texas Capital Bancshares’ higher possible upside, analysts clearly believe Texas Capital Bancshares is more favorable than Equity Bancshares.

Insider & Institutional Ownership

65.8% of Equity Bancshares shares are owned by institutional investors. Comparatively, 92.0% of Texas Capital Bancshares shares are owned by institutional investors. 8.6% of Equity Bancshares shares are owned by company insiders. Comparatively, 0.7% of Texas Capital Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Equity Bancshares has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Texas Capital Bancshares has a beta of 2.04, meaning that its share price is 104% more volatile than the S&P 500.

Summary

Texas Capital Bancshares beats Equity Bancshares on 11 of the 14 factors compared between the two stocks.

About Equity Bancshares

Equity Bancshares, Inc. operates as the bank holding company for Equity Bank that provides a range of financial services primarily to businesses, business owners, and individuals. The company accepts various demand, savings, money market, and time deposits. Its loan products include commercial and industrial, commercial real estate-backed, commercial lines of credit, working capital, term, equipment financing, acquisition, expansion and development, borrowing base, real estate construction, homebuilder, agricultural, government guaranteed, and other loans, as well as letters of credit and other loan products to national and regional companies, restaurant franchisees, hoteliers, real estate developers, manufacturing and industrial companies, agribusiness companies, and other businesses. The company's loan products also comprise various consumer loans to individuals and professionals, including residential real estate loans, home equity loans, home equity lines of credit, installment loans, unsecured and secured personal lines of credit, overdraft protection, and letters of credit. It also provides debit cards; online banking solutions, such as access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions comprising remote check deposits with mobile bill pay; ATMs; and treasury management, wire transfer, automated clearing house, and stop payment services. In addition, the company offers cash management deposit products, such as lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts, as well as banking services through telephone, mail, and personal appointments. As of December 31, 2019, it operated 52 full-service branches in Arkansas, Kansas, Missouri, and Oklahoma. The company was founded in 2002 and is headquartered in Wichita, Kansas.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial businesses, and professionals and entrepreneurs. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as other treasury management services, including information services, wire transfer initiation, ACH initiation, account transfer, and service integration; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing for working capital, internal growth, and acquisitions, as well as financing for business insurance premiums; real estate term and construction loans; mortgage warehouse lending; mortgage correspondent aggregation; equipment finance and leasing; treasury management services, including online banking and debit and credit card services; escrow services; and letters of credit. In addition, it offers personal wealth management and trust services; secured and unsecured loans; and online and mobile banking services. Further, the company provides American Airlines AAdvantage, an all-digital branch offering depositors. It operates in Austin, Fort Worth, Dallas, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was founded in 1996 and is headquartered in Dallas, Texas.

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