Analyzing Cullen/Frost Bankers (CFR) and WesBanco (WSBC)

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Cullen/Frost Bankers (NYSE:CFR) and WesBanco (NASDAQ:WSBC) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for Cullen/Frost Bankers and WesBanco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cullen/Frost Bankers 3 5 2 0 1.90
WesBanco 0 3 0 0 2.00

Cullen/Frost Bankers presently has a consensus price target of $108.25, indicating a potential upside of 15.55%. WesBanco has a consensus price target of $46.50, indicating a potential upside of 20.90%. Given WesBanco’s stronger consensus rating and higher probable upside, analysts plainly believe WesBanco is more favorable than Cullen/Frost Bankers.

Insider and Institutional Ownership

78.5% of Cullen/Frost Bankers shares are owned by institutional investors. Comparatively, 57.0% of WesBanco shares are owned by institutional investors. 4.6% of Cullen/Frost Bankers shares are owned by company insiders. Comparatively, 4.1% of WesBanco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Cullen/Frost Bankers has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, WesBanco has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Dividends

Cullen/Frost Bankers pays an annual dividend of $2.68 per share and has a dividend yield of 2.9%. WesBanco pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. Cullen/Frost Bankers pays out 49.2% of its earnings in the form of a dividend. WesBanco pays out 47.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cullen/Frost Bankers has raised its dividend for 26 consecutive years and WesBanco has raised its dividend for 8 consecutive years. WesBanco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
Cullen/Frost Bankers 32.11% 13.74% 1.38%
WesBanco 24.22% 9.04% 1.29%

Valuation & Earnings

This table compares Cullen/Frost Bankers and WesBanco’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cullen/Frost Bankers $1.23 billion 4.87 $364.14 million $5.45 17.19
WesBanco $421.26 million 4.98 $94.48 million $2.45 15.70

Cullen/Frost Bankers has higher revenue and earnings than WesBanco. WesBanco 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.

Summary

Cullen/Frost Bankers beats WesBanco on 12 of the 17 factors compared between the two stocks.

Cullen/Frost Bankers Company Profile

Cullen/Frost Bankers, Inc. operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. The company operates in two segments, Banking and Frost Wealth Advisors. It provides commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction, equipment, inventories and accounts receivable, and acquisition financing; commercial leasing; and treasury management services. The company also offers consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. Its international banking services comprise accepting deposits, making loans, issuing letter of credits, handling foreign collections, transmitting funds, and dealing in foreign exchange. In addition, the company acts as correspondent for approximately 203 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services consisting of sales and trading, new issue underwriting, money market trading, advisory services, and securities safekeeping and clearance; and supports international business activities. Further, it offers insurance and securities brokerage services; holds securities for investment purposes; and provides loans to qualified borrowers, as well as offers investment management services to Frost-managed mutual funds, institutions, and individuals. The company operates approximately 134 financial centers and approximately 1,300 ATMs in Texas. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

WesBanco Company Profile

WesBanco, Inc. operates as the holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, and mortgage banking and insurance services in the United States. It operates in two segments, Community Banking, and Trust and Investment Services. The company offers commercial demand, individual demand, and time deposit accounts; money market accounts; interest bearing and non-interest bearing demand deposits, as well as savings deposits; and certificates of deposit. It also provides commercial real estate loans; commercial and industrial loans; residential real estate loans, including loans to purchase, construct, or refinance borrower's home; home equity lines of credit; installment loans to finance the purchases of automobiles, trucks, motorcycles, boats, and other recreational vehicles, as well as home equity installment loans, unsecured home improvement loans, and revolving lines of credit; and commercial, mortgage, and individual installment loans. In addition, the company offers trust and investment services, as well as various investment products comprising mutual funds and annuities; and securities brokerage services. Further, WesBanco, Inc., through its non-banking subsidiaries, acts as an agency that specializes in property, casualty, life, and title insurance, as well as benefit plan sales and administration to personal and commercial clients; provides broker dealer and discount brokerage services; holds investment securities and loans; and holds and leases commercial real estate properties, as well as acts as an investment adviser to a family of mutual funds. As of December 31, 2017, the company operated through 172 branches and 160 ATMs in West Virginia, Ohio, western Pennsylvania, Kentucky, and southern Indiana, as well as 4 loan production offices in West Virginia, Ohio, and western Pennsylvania. WesBanco, Inc. was founded in 1968 and is headquartered in Wheeling, West Virginia.

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