Pinnacle Financial Partners (PNFP) & Eagle Bancorp (EGBN) Critical Survey

Pinnacle Financial Partners (NASDAQ: PNFP) and Eagle Bancorp (NASDAQ:EGBN) are both mid-cap commercial banks companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Pinnacle Financial Partners and Eagle Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pinnacle Financial Partners 27.41% 7.36% 1.18%
Eagle Bancorp 32.40% 12.37% 1.54%

Volatility & Risk

Pinnacle Financial Partners has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

70.4% of Pinnacle Financial Partners shares are owned by institutional investors. Comparatively, 69.0% of Eagle Bancorp shares are owned by institutional investors. 5.4% of Pinnacle Financial Partners shares are owned by insiders. Comparatively, 8.4% of Eagle Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Pinnacle Financial Partners and Eagle Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Pinnacle Financial Partners $484.61 million 10.38 $127.22 million $3.24 19.98
Eagle Bancorp $313.09 million 7.27 $97.70 million $3.22 20.68

Pinnacle Financial Partners has higher revenue and earnings than Eagle Bancorp. Pinnacle Financial Partners is trading at a lower price-to-earnings ratio than Eagle Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Pinnacle Financial Partners and Eagle Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pinnacle Financial Partners 0 1 4 0 2.80
Eagle Bancorp 0 2 3 0 2.60

Pinnacle Financial Partners presently has a consensus target price of $73.25, suggesting a potential upside of 13.13%. Eagle Bancorp has a consensus target price of $66.00, suggesting a potential downside of 0.90%. Given Pinnacle Financial Partners’ stronger consensus rating and higher probable upside, equities analysts plainly believe Pinnacle Financial Partners is more favorable than Eagle Bancorp.

Dividends

Pinnacle Financial Partners pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Eagle Bancorp does not pay a dividend. Pinnacle Financial Partners pays out 17.3% of its earnings in the form of a dividend.

Summary

Pinnacle Financial Partners beats Eagle Bancorp on 10 of the 16 factors compared between the two stocks.

Pinnacle Financial Partners Company Profile

Pinnacle Financial Partners, Inc. is a bank holding company. The Company operates through its subsidiary, Pinnacle Bank. The Company operates as a community bank primarily in the urban markets of Nashville, Knoxville, Memphis and Chattanooga, Tennessee and other counties. It provides the personalized service associated with small community banks, while seeking to offer the products and services, such as investments and treasury management. Pinnacle Bank offers an array of convenience-centered products and services, including round the clock telephone and Internet banking, mobile banking, debit and credit cards, direct deposit, remote deposit and cash management services for small- to medium-sized businesses. In addition, Pinnacle Bank is associated with a network of automated teller machines of other financial institutions that its clients are able to use throughout Tennessee and other regions.

Eagle Bancorp Company Profile

Eagle Bancorp, Inc. is a bank holding company for EagleBank (the Bank). The Bank is the Company’s principal operating subsidiary. The Bank is a chartered commercial bank. As of December 31, 2016, the Bank operated 21 banking offices: seven in Montgomery County, Maryland; five located in the District of Columbia, and nine in Northern Virginia. The Bank offers a range of commercial banking services to its business and professional clients, as well as consumer banking services to individuals living or working in the service area. The Bank also provides commercial banking services to proprietorships, businesses, partnerships, corporations, non-profit organizations and associations, and investors living and working in and near the Bank’s primary service area. The Bank offers a range of retail banking services to accommodate the individual needs of both corporate customers, as well as the community the Bank serves. It also offers online banking, mobile banking and remote deposit services.

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