Reviewing Cullen/Frost Bankers (NYSE:CFR) & Pinnacle Bank (OTCMKTS:PBNK)

Cullen/Frost Bankers (NYSE:CFR) and Pinnacle Bank (OTCMKTS:PBNK) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Volatility and Risk

Cullen/Frost Bankers has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Pinnacle Bank has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cullen/Frost Bankers and Pinnacle Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cullen/Frost Bankers	$2.85 billion	2.77	$582.54 million	$9.29	13.19
Pinnacle Bank	$53.91 million	2.22	$8.85 million	$1.78	11.35

Cullen/Frost Bankers has higher revenue and earnings than Pinnacle Bank. Pinnacle Bank 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.

Insider and Institutional Ownership

86.9% of Cullen/Frost Bankers shares are owned by institutional investors. Comparatively, 8.4% of Pinnacle Bank shares are owned by institutional investors. 2.9% of Cullen/Frost Bankers shares are owned 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.

Profitability

This table compares Cullen/Frost Bankers and Pinnacle Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cullen/Frost Bankers	21.20%	15.46%	1.18%
Pinnacle Bank	14.83%	7.72%	0.88%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cullen/Frost Bankers and Pinnacle Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cullen/Frost Bankers	3	9	2	1	2.07
Pinnacle Bank	0	0	0	0	0.00

Cullen/Frost Bankers presently has a consensus price target of $137.62, suggesting a potential upside of 12.27%. Given Cullen/Frost Bankers’ stronger consensus rating and higher possible upside, equities analysts clearly believe Cullen/Frost Bankers is more favorable than Pinnacle Bank.

Summary

Cullen/Frost Bankers beats Pinnacle Bank on 15 of the 15 factors compared between the two stocks.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.

About Pinnacle Bank

Pinnacle Bank, a commercial bank, provides various depository and credit services in Santa Clara, San Benito, and Monterey counties. The company offers checking, savings, money market, sweep, and individual retirement accounts, as well as certificates of deposit and certificates of deposit account registry services. It also provides home equity lines of credit and single family home construction loans; and loans and lines of credit, letters of credit, commercial real estate, and government assisted loans, as well as credit cards. In addition, the company offers automated teller machine cards/debit cards, debit card protection products, and safe deposit boxes; cash management products, such as online and mobile banking, online bill payment, mobile check deposit, automated clearing house (ACH) origination, remote deposit capture, night depository box, positive pay, ACH fraud filter, merchant card processing, wire transfer, and foreign currency services; and asset based lending covering accounts receivable financing, factoring, and purchase order financing services. It serves individual and business customers, as well as nonprofit organizations in Morgan Hill, Gilroy, Salinas, and Campbell. Pinnacle Bank was founded in 2006 and is headquartered in Gilroy, California.