Prosperity Bancshares (PB) vs. Tristate Capital (TSC) Head-To-Head Analysis

Tristate Capital (NASDAQ: TSC) and Prosperity Bancshares (NYSE:PB) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Tristate Capital and Prosperity Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tristate Capital 0 0 5 0 3.00
Prosperity Bancshares 2 6 2 0 2.00

Tristate Capital currently has a consensus target price of $28.60, indicating a potential upside of 18.67%. Prosperity Bancshares has a consensus target price of $72.70, indicating a potential downside of 3.04%. Given Tristate Capital’s stronger consensus rating and higher probable upside, equities analysts clearly believe Tristate Capital is more favorable than Prosperity Bancshares.

Valuation and Earnings

This table compares Tristate Capital and Prosperity Bancshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tristate Capital $144.82 million 4.76 $28.64 million $1.17 20.60
Prosperity Bancshares $794.20 million 6.56 $274.46 million $3.94 19.03

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

Profitability

This table compares Tristate Capital and Prosperity Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tristate Capital 28.41% 10.80% 0.91%
Prosperity Bancshares 34.79% 7.38% 1.23%

Volatility & Risk

Tristate Capital has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Dividends

Prosperity Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. Tristate Capital does not pay a dividend. Prosperity Bancshares pays out 36.5% of its earnings in the form of a dividend. Prosperity Bancshares has increased its dividend for 14 consecutive years.

Insider and Institutional Ownership

59.7% of Tristate Capital shares are held by institutional investors. Comparatively, 76.8% of Prosperity Bancshares shares are held by institutional investors. 23.4% of Tristate Capital shares are held by company insiders. Comparatively, 4.9% of Prosperity Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Prosperity Bancshares beats Tristate Capital on 10 of the 17 factors compared between the two stocks.

Tristate Capital Company Profile

TriState Capital Holdings, Inc. is a bank holding company. The Company’s subsidiaries include TriState Capital Bank (the Bank), a Pennsylvania chartered bank; Chartwell Investment Partners, LLC (Chartwell), an investment advisor, and Chartwell TSC Securities Corp. (CTSC Securities). The Company operates through two segments: Bank and Investment Management. The Bank segment provides commercial banking and private banking services to middle-market businesses and high-net-worth individuals through the Bank. The Investment Management segment provides advisory and sub-advisory investment management services to primarily institutional plan sponsors through Chartwell, and also supports distribution and marketing efforts for Chartwell’s investment products through CTSC Securities. The Company offers a range of products and services, including loan and deposit products, cash management services, and capital market services, such as interest rate swaps and investment management products.

Prosperity Bancshares Company Profile

Prosperity Bancshares, Inc. is a financial holding company, which operates through its bank subsidiary, Prosperity Bank (the Bank). The Bank provides a range of financial products and services to small and medium-sized businesses and consumers. The Company, through the Bank, offers a range of loan and deposit products to its customers. At December 31, 2016, the Bank maintained approximately 598,400 separate deposit accounts including certificates of deposit and 53,600 separate loan accounts. It offered commercial real estate (including multifamily residential) and one- to four-family residential loans, as of December 31, 2016. As of December 31, 2016, the Bank operated 245 full service banking locations; 65 in the Houston area; 29 in the South Texas area; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area; 34 in the West Texas area; 16 in the Bryan/College Station area, six in the Central Oklahoma area and eight in the Tulsa, Oklahoma area.

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